The Overseas Private Investment Corporation (OPIC) has approved up to $100m financing to Sarona Frontier Markets Fund 3, a private equity fund of funds (FoF) managed by Sarona Asset Management.
Elizabeth Littlefield, President and CEO of OPIC, said: “OPIC is very proud to be a supporter and an investor in Sarona, with its strong reputation and long track record in impact investing and financial inclusion.”
“Sarona really does exemplify what it means to be excellent at execution and implementation while at the same time being a thought leader in this important and fledgling world,” she added.
This is the second time that the US development finance institution is supporting the fund of funds manager (FoF).
In 2011, OPIC committed $50m to Sarona Frontier Markets Fund 2 (SFMF2), which was eventually launched in 2012 with commitments from OPIC and other investors.
SFMF2 has completed its investment period and its portfolio of investments is being actively managed by the Fund Manager.
Sarona Frontier Markets Fund 3’s capitalization is $300m, including the amount of the proposed OPIC loan.
The Fund 3 will invest in private equity funds that invest growth equity in small to mid-market companies in global frontier and emerging markets.
Sarona targets primarily sectors that are set to benefit from the rapidly rising middle class.
These sectors include healthcare, financial services, consumer goods and services, light manufacturing, transport, professional services, agribusiness, logistics, information and communication technology, services and components for clean and renewable energy, education and the food and beverage industry.
As a PRI signatory, Sarona does not invest in funds that aim to invest in mining, extractive or heavy polluting industries.
The FoF manager constructs diversified portfolios of locally-based private equity funds that provide growth equity to small and mid-market companies across global frontier and emerging markets.
Sarona does not currently invest in funds focused primarily on venture capital, real estate, infrastructure or agricultural production.
Only funds with a target size larger than $40m and smaller than $500m are entered into their active pipeline.
Sarona Asset Management seeks to implement strong ethical, social, and environmental policies, and to add significant strategic and management value to the funds in which Sarona Frontier Markets Fund 3 invests.
Sarona Asset Management is headquartered in Ontario, Canada and has three offices worldwide. Source: Africa Global Funds