United Capital, Lion’s Head to manage $32m German Fund

United Capital Asset Management and Lion’s Head have been appointed the Fund Managers of the $32 million (about N6.31 billion) Africa Local Currency Bond Fund (ALCB Fund), an initiative of the German Federal Ministry for Economic Cooperation and Development.

The alliance for the management of ALCB Fund, established by KfW, on behalf of the German agency, is expected to offer unrivaled experience in African debt markets, with substantive coverage across the continent.
The ALCB Fund’s mission is to support local African banks, financial institutions, agribusiness, and renewable energy companies to issue bonds and similar instruments in local currency.

Besides, the Fund aims to improve and diversify access to long term funding in domestic capital markets for the benefit of Micro, Small and Medium-sized Enterprises (MSMEs).

In the management alliance, Lion’s Head- a London, Nairobi-based merchant bank would bring capital markets expertise to develop finance initiatives for frontier markets.

Already, it advises across a broad range of capital markets and corporate finance initiatives across Africa, working with both the public and the private sector.

The Chairman of Lions’ Head, Bim Hundal, said: “The ALCB Fund is the latest innovative vehicle to have been established by the group, following similar initiatives in microfinance, agri-finance, interbank lending and foreign exchange hedging.

“Lion’s Head is known for financial innovation and pushing boundaries in the markets in which we operate and KfW has a long track record of promoting local Financial Sector Development in Africa.

“We are excited to add the ALCB Fund to our asset management platform. It exemplifies our commitment to bringing about change through the use of targeted, financially viable investment strategies.”

However, United Capital, an investment bank with extensive experience in high profile financial executions, had in 2014, executed the largest corporate bond issue in the Nigerian market, which was simultaneously listed on both the Nigerian Stock Exchange (NSE) and the Financial Market Dealers Quotation (FMDQ) OTC platform.

The Group Chief Executive Officer, Oluwatoyin Sanni, said: “It is an honor to be selected as Fund Managers alongside Lion’s Head in the management of the ALCB Fund. This further validates our capability and service proficiency strength at United Capital.”

Corroborating the statement, the Deputy Group Chief Executive Officer/Managing Director, Investment Banking, at United Capital, Wale Shonibare, added: “At United Capital, we are focused on delivering high impact innovative investment strategies for our clients. KfW has taken the first step in establishing the Fund to invest in local currency bonds in Africa. We believe that our African market expertise will allow us to provide the necessary tailored solutions to significantly grow the Fund, and to meet KfW’s development objectives”.

KfW has so far invested $32 million for the initial capitalisation of the Fund, out of which $18.4 million has been invested in seven non-sovereign local currency bond issuances on behalf of the German ministry.

“Having proven the concept of an African non-sovereign local currency bond fund by sourcing and implementing the first investments and managing the fund by ourselves, we are very happy to now hand over a high impact and good credit quality portfolio to experienced fund managers, to bring the fund to a truly sizable scale”
, a member of the Board of Directors of the ALCB Fund, Karl von Klitzing, said.