While the development of this asset class has traditionally been slow across all emerging markets, it has been slowest in Sub-Saharan Africa. According to the Emerging Markets Private Equity Association (EMPEA), mezzanine fund managers make up only 1.9% of the region’s private equity managers and mezzanine interest rates remain the highest in the world. This shortfall can particularly be attributed to the difficult business and regulatory environment in many Sub-Saharan African countries. Mezzanine investments rely heavily on the ability to enforce contracts, which are often not supported by documented legal precedents in many African jurisdictions. Hence, such investments require seasoned investment professionals with a strong understanding of both, debt and equity.
Vantage III will be managed by Vantage Capital (“the Manager”), a fund management company based in South Africa. The mezzanine investment team is composed of 14 seasoned investment professionals with a mix of private equity, banking and structured finance experience. Having the second highest BEE (Black Economic Empowerment) rating, the Manager is also committed to the empowerment of historically disadvantaged groups in South Africa, and the majority of Vantage Capital is owned by citizens belonging to such groups.