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: 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.
Verdant Capital Hybrid Fund
Position in the capital structure
Subordinated debt to non-deposit taking institutions
Basel III – Tier 2 Capital
Basel II – Additional Tier 1 Capital
Basel II – Tier 2 Capital
Holding company debt