Key Takeaways
- • IFC has disclosed a proposed investment of up to $7.5 million in Cauris Finance's Third Wave Fund, a structured debt fund targeting tech-enabled lenders across Africa.
- • The fund is managed by Cauris Investment Management, a US-based credit investment firm, and is targeting $75 million with a hard cap of $100 million.
- • IFC's proposed commitment would be a loan in the fund's senior debt tranche, with a five-year term, a grace period of up to 48 months, and a 12-month amortisation period.
- • The capital structure comprises 60% senior debt, 30% mezzanine debt and a 10% first-loss tranche, providing 40% subordination beneath the senior debt.
- • Roughly 40% of capital will target mobility-sector lease-to-own fintechs, with the remaining 60% directed to fintech lenders providing working capital to MSMEs.
Summary
The International Finance Corporation (IFC) has disclosed a proposed investment of up to $7.5 million in Cauris Finance's Third Wave Fund, according to Africa Private Equity News. The vehicle is a structured debt fund focused on tech-enabled lenders across Africa and is managed by Cauris Investment Management, a US-based credit investment firm.
The fund is targeting $75 million in commitments, with a hard cap of $100 million. IFC's proposed investment would take the form of a loan within the fund's senior debt tranche. The loan would carry a five-year term, including a grace period of up to 48 months, followed by a 12-month amortisation period.
The fund's capital structure comprises 60% senior debt, 30% mezzanine debt and a 10% first-loss tranche. This provides 40% subordination beneath the senior debt tranche, a cushion that is central to the senior lenders' risk profile.
By allocation, approximately 40% of the fund's capital will go to the mobility sector, financing vehicle lease-to-own fintech companies that serve entrepreneurs and gig-economy workers. The remaining 60% will target fintech lenders providing working capital to micro, small and medium-sized enterprises (MSMEs).
The fund is targeting $75 million in commitments, with a hard cap of $100 million. IFC's proposed investment would take the form of a loan within the fund's senior debt tranche. The loan would carry a five-year term, including a grace period of up to 48 months, followed by a 12-month amortisation period.
The fund's capital structure comprises 60% senior debt, 30% mezzanine debt and a 10% first-loss tranche. This provides 40% subordination beneath the senior debt tranche, a cushion that is central to the senior lenders' risk profile.
By allocation, approximately 40% of the fund's capital will go to the mobility sector, financing vehicle lease-to-own fintech companies that serve entrepreneurs and gig-economy workers. The remaining 60% will target fintech lenders providing working capital to micro, small and medium-sized enterprises (MSMEs).
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