CDC backs South Africa’s debut mezzanine fund

UK fund-of-funds CDC has invested R100 million in Vantage Mezzanine Fund, the first mezzanine fund to be raised in South Africa. The fund is expected to close this August on about R600 million.

CDC, a UK government-backed fund-of-funds, has committed R100 million (€10 million) to Vantage Risk Capital’s South African mezzanine fund.

The fund held a first close of R310 million in August 2006, and has so far attracted commitments of nearly R500 million. It has a final target of R550 million to R600 million.

The fund will invest in South African companies with an enterprise value of between R150 million and R750 million. Investors include the FMO, the Netherlands Development Bank, the Public Investment Corporation, the Eskom Pension and Provident Fund, Transnet Pension Fund and Metropolitan Asset Managers.

The fund will be managed by Luc Albinski, previously head of mezzanine finance at Standard Bank South Africa, and Colin Rezek, who co-founded Vantage Capital Group in 2001. Since this date, the Johannesburg-based firm has invested R130 million in 10 companies in the region.

CDC has invested more than R1.8 billion in South African private equity funds since 2003.

R2.55 billion of private equity was invested in South Africa in 2005, 62 percent of which came from Europe, according to the African Venture Capital Association.