The AAF SME Fund, managed by Databank Agrifund Manager Limited, had a vintage year of 2012. This private equity fund was established to focus on food production and processing at the small and medium enterprise (SME) level throughout the African continent.
The AAF SME Fund was established out of the African Agriculture Fund (AAF), a US$ 300 million agriculture private equity investment fund managed by Phatisa.
These small and medium businesses (formal and informal) represent the real economy and remain critical to the economic development of the continent.
Salient Features
• The fund is focused on value enhancement and value chain optimisation
• The fund is supported by a €6 million Technical Assistance Facility (TAF) that is aimed at improving the capacity of portfolio companies and providing linkages to outgrowers within the ecosystem.
• The funds investments focused on optimising financial returns while enhancing development returns.
Investment Criteria
• Investment requirement of US$ 1 million to US$ 4 million.
• No more than 300 permanent employees.
• Total asset value of no more than US$ 15 million.
• Strong management team with a demonstrable entrepreneurial background and willingness to collaborate transparently with an engaged investor.
• Clearly articulated and compelling vision for the business showing significant growth potential.
• Realistic entry valuation and ability to achieve a profitable liquidity event in the medium term.
Technical Assistance Facility
The Technical Assistance Facility (TAF), is a complementary support facility, primarily funded by the EU (European Union), managed by IFAD and implemented by TechnoServe, with additional contributions from the Italian Development Co-operation, UNIDO (United Nations Industrial Development Organization) and AGRA (Alliance for a Green Revolution in Africa). TAF supports the AAF SME Fund portfolio companies’ management teams with strategic, operational and technical expertise to enhance their growth. With up to US$ 500,000 of assistance available per business, this provides a significant opportunity to bolster and build the AAF SME Fund investments.
