Vantage Capital - Afrikan Heroes

Vantage Capital Exits Cap Tamarin

May 9, 2023

Roshal Ramdenee, Associate Partner at Vantage Capital

Vantage Capital (www.VantageCapital.co.za), Africa’s largest mezzanine debt fund manager, announced that it has fully exited its investment in Cap Tamarin, a smart city development located in the town of Tamarin on the west coast of Mauritius, managed by Trimetys Group. Vantage’s exit was financed by an equity and bond raise that also provided funds for further expansion of the development.

Vantage provided $10m to Cap Tamarin in Jul 2018 to fund the infrastructure and amenities of the development which included civil works, telecom works, electrical works and construction of the park and bridges. Whilst banks were unwilling to fund the early-stage construction risk, Vantage recognised the potential of Cap Tamarin, a mixed-use development project in a prime coastal location that combines an aspirational island village lifestyle with a strong developmental impact on surrounding communities. Today, all major roads and bulk infrastructure at Cap Tamarin have been completed as well as various phases including a supermarket, primary school, gas filling station, sports club, offices and commercial units. Various other projects are also underway including the development of a medical clinic, retirement village and various residential units.

Roshal Ramdenee, Associate Partner at Vantage Capital, said “Vantage is pleased to have supported Cap Tamarin, a project with significant potential for both the local community and investors. Our ability to provide flexible funding for the early-stage construction of the development, when traditional banks were unwilling to do so, highlights our commitment to supporting high-impact projects in Africa. We are proud to have fully exited our investment and to have contributed to the successful completion of major infrastructure and amenities at Cap Tamarin.”

Warren van der Merwe, Managing Partner at Vantage Capital, added “The Jhuboo family and Trimetys have been visionary and trustworthy sponsors to invest with. We wish them all the best in taking this landmark development to its successful conclusion.”

Kian Jhuboo, Director at Trimetys noted, “Vantage Capital has been a valuable partner and has accompanied our project with great professionalism and also a great listening ear thanks to Warren and his team.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Vantage Capital Launches 4th Mezzanine Fund

July 12, 2021

Vantage Capital Managing Partner Warren van der Merwe

Mid-sized African businesses stand to benefit from flexible capital that will enhance job creation and facilitate much-needed economic opportunities and growth with the fourth fund launched by Africa’s largest messazine fund manager, Vantage Capital. The company said that the $207 million of commitments from European and US-based commercial investors as well as development finance institutions (DFIs), including IFC, CDC Group and SIFEM, means that Vantage Mezzanine Fund IV is on track to reach its target total fund size of US $350 million.

The fund will provide mid-sized African businesses with flexible capital that will enhance job creation and facilitate much-needed economic opportunities and growth – especially necessary for post-Covid-19 recovery.

According to the Managing Partner Warren van der Merwe, “Vantage is proud of the continued support received from its investors. We were the first independent mezzanine fund in South Africa when we raised Fund I in 2006. Mezzanine was not well known in South Africa at that time, let alone in the rest of Africa. Since then, we have taken our mezzanine product across Africa to 15 target markets, having invested in 11 of them. Our fundraising success, in such a challenging environment, is a validation of the mezzanine asset class in Africa and of our role as a pioneer in this space over the past 15 years. As with previous funds, most of the funds have been raised from private sector investors such as insurers, pension funds and endowments who find our contractual yields and equity upside exposure attractive when compared to private equity alternatives. We have also received valuable support from DFI investors, namely IFC, CDC Group and SIFEM, who appreciate the impact that mezzanine can have in growing mid-sized African enterprises.”

Since 2006, Vantage Capital’s Mezzanine division has made 31 investments across three funds into 11 African countries, making it the largest and most experienced independent mezzanine funder on the continent. Its inaugural mezzanine fund was raised in 2006, with US $150 million invested into five South African companies. In 2012, its second mezzanine fund of $240 million was raised, investing into a portfolio of 13 companies across Africa. This was followed by its third mezzanine fund of US $287 million raised in 2015, with a further 13 investments spread across the continent.

“Vantage Capital’s mezzanine offering plays an important role in supporting the growth of mid-size businesses that would otherwise struggle to access capital through conventional banking channels”, explains Luc Albinski, Executive Chairman. “Vantage’s non-dilutive funding enables business owners to retain control and hold on to their equity, while at the same time accessing the capital needed to realise their full potential. This, in turn, plays an important role in driving economic growth, job creation and improved prosperity.”

Over the past 15 years, Vantage has funded a number of success stories. Vumatel, a fibre-to-the-home network operator in South Africa, is one such example. Vantage invested in the company in 2016, at a time when it had a small subscriber base of 3,500 but was well-poised to take advantage of tremendous household demand for fibre. With the help of Vantage’s expansion funding, in a little over two years the company grew its subscriber base to over 90,000 and enjoyed exponential growth in operating profit. Another example is Pétro Ivoire, where in 2018 Vantage facilitated the first-ever leveraged management buyout in Francophone West Africa. The transaction enabled the founding family to regain control of their business by using Vantage’s mezzanine debt to buy out their private equity investors. In the past year, Vantage has also provided growth capital that facilitated CIM Santé’s expansion of its clinics across Morocco; and in late 2020, the fund manager provided PickAlbatros Hotels in Egypt with capital for its renovations, at a time when banks were reluctant to support the hospitality sector due to the negative impact of Covid-19.

Vantage will continue its focus on supporting Africa’s mid-market sector as it commences deployment on its newly-raised fourth mezzanine fund.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Vantage Capital Raise $5 Million Funding for Alleyroads South Africa

July 23, 2020

Alleyroads, one of South Africa’s leading affordable housing developers has received $5 million funding (82 million rands) from Vantage Capital, Africa’s largest mezzanine fund manager, aimed at expanding operations in providing affordable housing. Alleyroads is a developer which is working to meet the demand for sustainable housing and help fulfill the government’s ambitious goal of providing homes for all citizens. The R82 million of mezzanine funding for the development of Kayalane Heights, a first-of-its-kind affordable housing development located in Lebowakgomo, Limpopo. The promoter of the transaction is the Alleyroads Group, a leading South African black-owned property development company led by Ivan Pretorius. Since its inception in 2009, Alleyroads has built more than 3,000 residences across South Africa including over 1,500 affordable homes.

Ivan Pretorius the Managing Director of Alleyroads Group

The current housing shortage in South Africa is extensive, the government estimates that there is a shortfall of circa 2 million homes. A number of initiatives have been implemented in the private and public sectors to reduce the deficit, however the current rate at which affordable housing is being delivered is less than the population growth rates in many areas. Alleyroads is a developer which is working to meet the demand for sustainable housing and help fulfil the government’s ambitious goal of providing homes for all citizens within 10 years.

In Lebowakgomo, there is a shortage of affordable rental housing despite significant demand. The region is currently home to over 45,000 residents, several government offices and its bespoke shopping outlets offer a myriad of retail options. Located in the heart of Lebowakgomo, the Kayalane Heights precinct will offer in excess of 256 attractive two-bedroom apartments, 24-hour security controlled access, covered parking, and a beautifully landscaped common area for leisure activities, all at an affordable price. The development is a short walk from a world class hospital and minutes from the bustling city centre.

Ivan Pretorius the Managing Director of Alleyroads Group noted, “Alleyroads sought a strong funding partner to support the Kayalane Heights precinct, we are delighted to see the confidence Vantage Capital has placed in the development and we welcome a long term partnership.” This transaction represents Vantage Capital’s 29th mezzanine investment across three generations of funds in ten African countries. Outside of South Africa, Vantage has invested in eleven transactions across Morocco, Côte d’Ivoire, Ghana, Nigeria, Uganda, Kenya, Mauritius, Namibia and Botswana.

Warren van der Merwe, Managing Partner at Vantage Capital said, “Vantage Capital is excited to be investing in the affordable housing space, making access to affordable housing a reality for hundreds of South Africans. We are very impressed with Alleyroads’ strong management team, vision and track record of quality execution over the past 12 years.”

Johnny Jones, Partner at Vantage Capital, added, “We are proud to support one of South Africa’s leading black developers who is seeking to narrow the country’s housing shortage in Lebowakgomo by providing high quality homes at an economical price.” Qualirod Capital acted as financial advisor to the transaction, Werksmans Attorneys acted as legal counsel for Vantage, and other advisors included Cliffe Dekker Hofmeyr, Arup, Pro Africa and IBIS Consulting.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Why Vantage Capital exits Vumatel

May 8, 2020

Luc Albinski, co-Managing Partner at Vantage Capital

Vantage Capital, Africa’s largest mezzanine debt fund manager, announced that it has fully exited its investment in Vumatel, the largest fibre-to-the-home network provider in South Africa. The company was established in October 2014 by Niel Schoeman and Johan Pretorius, industry veterans who had previously started up the Birchman Group and Conduct Telecom before creating Vumatel.

Vumatel started out its life rolling out South Africa’s first fibre optic network to homes in Parkhurst by partnering with internet service providers who provided connectivity to their residential customers whilst Vumatel remained the owner and operator of the infrastructure.

At the time of Vantage’s investment in 2016, Vumatel had deployed its open-access fibre optic network across fourteen suburbs in Johannesburg, passing 16,000 homes and had secured around 4,000 subscribers. It had also received an equity investment from Investec Equity Partners.

Whilst banks were unwilling to fund the company at this early stage in its life, Vantage recognised the tremendous potential of the business and supported it with R250m ($17m) of capex funding to accelerate its rollout. Today, just four years later, Vumatel has become the largest provider of fibre to the home in the country. Over the life of Vantage’s investment, the number of homes passed has grown forty-fold and the number of subscribers fifty-fold as the company has laid thousands of kilometres of cable. Vumatel has also played a major role in upgrading the infrastructure of South African schools by providing free uncapped fibre services to public and private schools that its networks bypass.

In 2018, Vumatel was recognised with a prestigious award from the South African Venture Capital Association for the best medium-sized South African growth champion.

Last year, CIVH majority owned by Remgro acquired full ownership of Vumatel after initially securing a 34.9% stake in 2018. Vantage’s investors were beneficiaries of this transaction from both ends as Vantage had in a separate transaction provided New GX, a black owned and controlled investor, with mezzanine funding to part-finance their fibre-related assets including local manufacturing capacity.

Vantage exited the New GX transaction in 2018 and last week, Vantage’s mezzanine facility was refinanced by Vumatel after it secured substantial funding from a consortium of South African banks.

To date, Vantage has now successfully exited twelve investments across its three generations of mezzanine debt funds generating cumulative proceeds of R4.2bn ($360m) and x-money of 2.3x (1.8x in dollars).

Luc Albinski, co-Managing Partner at Vantage Capital, pointed out that “Vumatel is one of our many success stories, where we have supported businesses with mezzanine debt to achieve their growth ambitions. In this investment, we saw the opportunity to partner with an exceptional management team in a fast-growing sector and we are proud of the role Vantage played in unlocking the exceptional growth that Vumatel has since delivered.”

Warren van der Merwe, co-Managing Partner at Vantage Capital, added: “The Vumatel investment is an excellent case study of how mezzanine debt can unlock growth opportunities where banks remain risk-averse. In this way, Vantage plays an important role in supporting mid-size corporates before they are sufficiently established to fully fund their operations and growth ambitions with bank debt.”

Hugo van den Heever, Associate Partner at Vantage Capital, added “we have focused a lot of attention on the technology infrastructure sector with its high growth potential. In line with our pan-African mandate, we have looked at opportunities across the continent including markets such as Nigeria, the East African Community and Egypt. We hope to be able to announce further investments in this sector shortly.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry