CDC, the UK’s development financing institution, announced a USD 15 million investment in Schulze Global Ethiopia Growth and Transformation Fund,
the first Ethiopia-focused fund, on Wednesday May 9th 2012 at a press conference held at Radisson Blu Hotel. The fund is the first ever international private equity focused exclusively on Ethiopia, with a target size of USD 100 million. It will make equity investments into promising businesses in a range of sectors including Agro-processing, industrial and manufacturing.
“Ethiopia has huge economic potential, but it needs bold, pioneering investors such as CDC to help grow its nascent private sector and reach this potential. CDC has been in discussions with the Schulze Global team for over a year. Schulze’s record of its on-the-ground presence, extensive network and approach to improving environmental, social and governance standards make it an attractive team, particularly in an emerging market where the first mover will set the standard,” stated Shonaid Jemmett-Page, CDC Chief operating officer.
The fund through its private equity investments, will deliver not only capital but also operational and managerial support to ensure sustainable growth.
Achieving commercial risk-adjusted returns for investors, creating non-financial returns for all stakeholders by driving improvements in social, environmental and governance standards and contributing to long term sustainable economic development which creates new jobs, are among the fund’s major goals.
Responding to the announcement, Hon.Andrew Mitchell, Secretary of State for the UK’s Department for International Development stated that, for the first time, CDC is directing its much-needed capital to help promising entrepreneurs and businesses in Ethiopia to transform agriculture and food production.
“Addis Ababa was not the expected destination for this investment, at the beginning, but now we believe there is a really big market potential here. Schulze Global Ethiopia won’t just be providing capital to the businesses but also expertise on how to sustain the businesses,” said Gabriel Schulze, founder of Schulze Global Investments.
The fund will generally seek to deploy USD one to ten million per investment, with a strategy to target small and medium Enterprises (SMEs) that have the potential to become industry leaders in Ethiopia. The fund will be a patient investor, generally holding shares for multiple years and utilizing its capital and expertise to develop companies that will continue to thrive long after the fund’s eventual exit.