Local SMEs set to benefit from Shs130b equity fund

stronKampala. stron

Small and Medium Enterprises (SMEs) that have not matured to raise capital through the stock market can now benefit from funds mobilised by private equity players to grow their businesses further, trade and investment experts have said. One such equity fund that the SMEs should take aantage of, according to the industry experts, is the $50 million (about Shs131 billion) that has been made available by Eastern Africa’s new private equity player, Ascent.Last week, Ascent announced the first close of their =Ascent Rift Valley Fund (ARVF), which raised $50 million to be invested in growth of enterprises across Eastern Africa—with SMEs being among those targeted to benefit from the fund. “Ascent will invest in 8 to 12 companies across the region. The investment size will be between $1million (about Shs2.6 billion) and $9 million (about Shs27 billion),” reads the press statement issued by the private equity player, Ascent.In an interview yesterday, Capital Market Authority chief executive officer Keith Kalyegira said: “ Anything thing that helps SMEs become better is welcome. And anyone that can help SMEs with patient capital (long term capital) is even far better.”He continued: “Private and public equity are good avenues that SMEs can take aantage of. However, the only challenge is that most of our SMEs have bad governance structures and do not pay attention to important operational details of their companies.” Mr Edgar Mutebi, a trade analyst, told the Daily Monitor yesterday that funds provided by the private equity will help SMEs that are trying to list (raise money through capital markets) but are short of the required threshold. He said: “SMEs can take aantage of the equity funds and then two years down the road they can hit the stock market for more funds.”

stronSource of the fundsstron

The $50million fund was tapped from the local institutional capital, including pension funds, in its first fundraising. The total Kenyan institutional capital contribution to the Ascent Rift Valley Fund currently stands at $5 million, which is 10 per cent of total commitments. Commercial investors – local institutions and private international investors have committed 70 per cent of the funds. Speaking at the launch of the fund, Ascent Capital Aisory Services’ Partner David Owino, said: “This is the first time in the region that local pension funds have committed to invest in a private equity fund.”

iladu@ug.nationmedia.com

SOURCE: Daily Monitor

Leave a Reply

Releated

Arrest of CNN Crew in Minneapolis a ‘Violation of First Amendment’

A CNN news crew on Friday live broadcast their own arrest by police in the U.S. state of Minnesota, as they covered protests over the death of an African-American man. Police handcuffed and arrested CNN reporter Omar Jimenez, producer Bill Kirkos and photojournalist Leonel Mendez at about 5 a.m. CT in Minneapolis, despite Jimenez identifying […]

‘No Decision’ on Next Launch Attempt for SpaceX-NASA Mission

A final decision on a launch attempt for SpaceX’s milestone mission to the International Space Station on Saturday afternoon will take place after assessing the weather that morning, NASA chief Jim Bridenstine said Friday. Fears of a lightning strike postponed the initial takeoff attempt Wednesday of what would have been the first crewed rocket launch […]