Verdant Capital Hybrid Fund

Instruments Targeted

Position in the capital structure

Verdant Capital is raising a fund, the Verdant Capital Hybrid Fund, a USD 80 million fund to invest in hybrid capital for inclusive financial institutions: challenger banks, microfinance banks, fintechs, SME-lenders, housing finance and similar non-bank financial institutions. Hybrid capital describes a range of instruments from subordinated debt to preferred equity which are popular in the banking sector globally, but rarely available to financial institutions in Africa. Hybrid capital instruments enables regulatory capital to be tiered according to factors such as its degree of subordination, tenor and loss-absorption capacity. Hybrid capital provides an intermediate capital tier that is leveraged by senior debt investors, local and international, effectively crowding in other sources of capital. The fund is a Mauritian limited partnership with a twelve-year life.

Debt Like

Equity Like

Subordinated debt to non-deposit taking MFI

Basel III – Tier 2 Capital

Basel II – Additional Tier 1 Capital

Basel II – Tier 2 Capital

Holding Company Debt

Transaction Structure

Private

Public

Private Transactions (fund only)

Private Transactions ("club deal")

Pre-listed Instruments (anchor investor)