Ascent Rift Valley Fund II

Direct: Through providing capital and value-add to c. 10-12 SMEs, the Fund will support their regional expansion, job creation and more responsible business practices. Target sectors: manufacturing, healthcare, FMCG, retail, financial services, secondary & tertiary agriculture (sector limit of 30%)

Catalysing markets: By delivering a strong commercial performance, the fund can demonstrate the viability of investing in nascent PE markets where deal activity is currently limited (excluding Kenya). A more developed private equity ecosystem will address some of the financing gap that constrains private sector development which could unlock both economic opportunities and improved access to goods and services. Repeated positive commercial returns will, in the long-term, attract other GPs and LPs to the market. Signposts of success would be the successful raise of a follow-on fund and – in the next 5-10 years - a material increase in private equity activity in the region (both by local and regional investors).

Ethiopia, Kenya (up to 45% of commitments), Uganda (up to 30% of commitments), Rwanda and Tanzania (up to 10% of commitments)

Inclusion: There is some evidence to suggest that smaller firms tend to employ more vulnerable groups within a society, such as women, youth and underserved segments of the population.

Previous fund had a median CAGR of 12% on job creation above average for our Africa SME funds benchmark. If this performance is delivered by Fund II, we can expect >1,600 jobs over the lifetime of the investment.

Manager reports 11% wages uplift on employees from previous fund. It will take 5 to 10 years and repeat success for the catalytic impact to materialise.

• Financial additionality: We are anchoring the fund and helping it reach a minimum viable size.
• Value additionality: Further support to the fund manager in institutionalising business integrity and environmental and social management systems will be provided

2.7-3.5

Execution Risk

• Relates to the risk that the fund fails to successfully fundraise and execute on strategy, therefore jeopardising both the Direct and catalytic impact. Mitigant: This risk is correlated to commercial risk and will be monitored through the standard monitoring process.

External Risk

• Relates to probability that regardless of the fund’s Financial performance, commercial investors will remain averse to investing in these nascent markets due to perceived high risks or macro-economic dynamics. the catalytic impact relies on repeated successes from multiple players. This risk is inherent in supporting these markets and has to be tolerated.