May 29, 2018

US$50m Oasis Africa VC Fund launched for SMEs

The US$50million Oasis Africa Venture Capital Fund has officially been launched to support Small and Medium Enterprises (SMEs). The fund has the capacity to invest between US$500,000 to US$5million in one investee.

At a short but impressive ceremony, Matteew Boadu Adjei, Chief Executive Officer of Oasis Capital, a growth capital fund manager, said this fund is available exclusive to SMEs, who are the drivers of growth.

“The targets of this fund are the entrepreneurs and SMEs in Ghana and Ivory Coast who provide essential services for the growing Africa middle class using scalable business models. At Oasis Capital, the transformation of business is our supreme interest.

Our patient capital is available to willing institutions in housing and hospitality, private education, health and related services, financial services and food services. We believe these sectors are the drivers of the African growth and development story,” he said.

He urged local businesses, especially, to prioritise corporate governance so that operations can be strengthened and allow businesses to cross generations.

“Businesses collapse due to weak operations, poor corporate governance, quirks of entrepreneurs and lack of capital. We cannot have a total overhaul of the business environment every 25years. It is about time we build sustainable and inter-generational businesses,” he said.

Investors in the Oasis Africa VC Fund include Proparco, International Finance Corporation (IFC), Norfund, Dutch Good Growth Fund, the Venture Capital Trust Fund (VCTF), GCB Bank, Stanlib Ghana, and others.

The Oasis Africa VC Fund is the second fund since the commencement of business by Oasis Capital. Its first fund and current fund, Ebankese Venture Fund (EVF) had US$13.2million as asset under management and is fully invested.

The Ebankese Venture Fund is currently invested in GHS Limited, RisingSun Montessori School, Penfield School, Builders Accessories Ghana, Wenchi Rural Bank, Charleston Hotel, Redrow Developments and Axis Pensions Group, which has been exited.

CEO of the VCTF, Yaw Owusu-Brempong, noted that the successful close or launch of the Oasis Africa VC Fund represents an achievement on the part of the VCTF. “The VCTF was the largest investor in Oasis’ first fund and in the second fund, the VCTF is now one of the smallest investors. For us though, this is a success.

A local fund manager, who started less than 10 years, has joined the ‘big financiers of Africa’. This is because the current allows the team to also invest outside of Ghana. this is what we sort to do with our mandate of building a viable VC industry in Ghana, thereby making Ghana the hub for VC investing activities in the sub region,” he added.

Professor Joshua Abor, the head of University of Ghana Business School, noted that private enterprises in Ghana account for 90percent of businesses and contribute between 70-80percent of employment.

He added that PEs and VCs hold the key to the growth of these businesses because they insist on the best corporate governance structures and lead them onto the path of profitability.

“Government must enhance the capacity of these PEs and VCs so they can support economic growth. We can grow the public equity market if our private equity market is well developed. Government can also encourage institutional investors to invest in PEs and VCs,” he added.

Other dignitaries including the Ambassador of the Kingdom of the Netherlands, Ronald Strikker shared their experiences in doing business in Ghana and dealing with Oasis Capital. Malick Ouattara, a partner at Oasis Capital but representing the firm in Ivory Coast made a presentation on the business climate and opportunities present in the West African nation.

Board Chairman of the company, Albert Essien, urged SMEs to take advantage of this fund to expand their operations.

“If I were an SME, I will be extremely delighted that this is another avenue to raise funds. However, these funds come with some discipline, governance structure and these are quite scares in our country. We need that discipline and structure to make sure that companies will not wither and die but will grow and be around for many years to come,” he added.

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