Barak Mikopo Development Fund Update
The Barak Mikopo Development Credit Fund, now in its second year of operation, has built up a particularly strong pipeline in Q4 2017 and Q1 2018.
Posted: 23 August 2018
The Barak Mikopo Development Credit Fund approaches the second quarter of the year in a healthy position to grow the Fund’s AUM to a respectable level. There are a variety of sectors that the Fund is currently looking at and continues to grow its footprint across the African continent.
The Barak Mikopo Fund is an unlisted open-ended African alternative credit fund providing qualified investors access, via equity or senior secured debt, to a portfolio of credit investments with underlying maturities ranging from short term trade finance (30 days -1 year) to medium-term structured credit facilities with maturities up to 5 years. The Fund will provide facilities, diversifying exposure in high growth sectors, countries and maturities, whilst maintaining a developmental focus. The Fund will focus on initially capital raising for its leveraged share class (gearing of up to 2 times), and is targeting a net return to investors in the equity space of 14 – 16%. The AUM target for the remainder of 2018 is US$250M.
The Fund’s current AUM stands at US$90M, comprising of US$75M of equity and US$15M of debt. Returns at the moment on a 12-month rolling basis are within the 8.50% region. In order to raise on both the debt and equity side, the Barak Deal Origination team has worked hard to raise this pipeline to a particularly strong and concrete level for the remainder of 2018 for these more term, CAPEX deals that are needed throughout Africa. Some of the key deals in pipeline stage (as well as currently being live deals for the Fund) include:
Ghanaian Power Generators – US$120M
Republic of Congo Crude Oil – USD85M
Kenyan Logistics Equipment – US$50M
Senegalese Power Plant – US$35M
Ghanaian Gas Pipeline – US$30M
Kenyan Energy Deal – US$25M
South African Coal Plant Infrastructure – US$10M
Nigerian Marine Equipment – US$7M
The above key deals have laid the foundation for a particularly strong Q2 2018 for the Barak Mikopo Development Fund, and although short-term trade finance transactions remain a core priority for Barak’s business activities and the sustained performance of the Barak STF Fund is of critical importance given the relative AUM, infrastructure financing opportunities in Africa are numerous and crucially scalable. The Mikopo Fund adds another tranche to Barak’s success in alternative financing in a continent starved of financial support and guidance.