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Date: 2 March 2021

New Investment Committee members to the Verdant Capital Hybrid Fund

New Investment Committee members to the Verdant Capital Hybrid Fund
Osu street scene, Accra, Ghana

Verdant Capital is pleased to announce that two new members have joined the Investment Committee of the Verdant Capital Hybrid Fund.

  • Sari Nikka previously served as the CEO of Norsad Finance, the Development Finance Institution (“DFI”) for Southern Africa. Prior to working for Norsad, she held senior investment positions at Finnfund, the Finnish DFI. Ms Nikka has served on various Boards and Board Committees of companies and investment funds investing in Africa, Asia, Latin America, and Eastern Europe. She has a range of experience from project finance, senior debt instruments, mezzanine, and equity investments, as well as financing solutions for microfinance institutions and commercial banks. Ms. Nikka now principally serves on boards and performs senior advisory roles with emerging markets-focused funds and financial institutions. 
  • Kanako Sekine was the Managing Director, Portfolio, of the European Bank for Reconstruction and Development (“EBRD”) until 2018. Her team was responsible for overseeing the Bank’s portfolio assets of debt and equity. Ms Sekine first joined the EBRD in 1993 and for 15 years worked with their Financial Institutions team, heading the Bank’s in-house fund of private equity funds and co-investment programme. Prior private equity and investment banking experience includes with Troika Capital Partners in Russia and with Smith Barney, Harris Upham & Co in New York. Ms. Sekine also now serves on boards and performs senior advisory roles with private investment funds and regulated financial institutions focusing on or based in emerging markets.

Verdant Capital is raising the Verdant Capital Hybrid Fund, a USD 80 million fund to invest hybrid capital into Inclusive Financial Institutions (“IFIs”): banks, microfinance banks, fintechs, SME-lenders, affordable housing financiers and similar non-bank financial institutions. The Hybrid Fund is anchored by two leading European DFIs.

Hybrid capital describes a range of instruments, from subordinated debt to preferred equity which are commonly used across global banking sectors, but rarely available to financial institutions in Africa. Hybrid capital instruments enable regulatory capital to be tiered according to factors such as its degree of subordination, tenor, and loss-absorption capacity. Hybrid capital also provides an effective intermediate capital tier that can be leveraged by local and international senior debt investors, effectively “crowding in” other sources of capital.

According to Verdant Capital’s 2020 Survey of microfinance banks, 57% of IFIs expected to raise equity or equity-like capital in “early 2021”. The majority of these IFIs are raising the capital to underpin loan book growth, indicating robust demand for credit from MSMEs as the Continent emerges from the Covid-19 pandemic. Verdant Capital further believe this supports the core hypothesis of the Hybrid Fund.

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