InFrontier Afghanistan Fund Launched in December
The InFrontier Afghanistan Fund, the only private equity fund focused on Afghanistan, was launched in December and has reached a first close of US$22M with investors that include CDC, the UK’s development finance institution, and the Dutch Good Growth Fund, an initiative of the Dutch Ministry of Foreign Affairs.
The fund, which is managed by London and Kabul-based, InFrontier, will invest in established businesses that have the potential to become market leaders in the country, focusing across multiple sectors and making long term investments.
InFrontier sees the potential to generate commercial returns to investors whilst supporting socioeconomic development in one of the world’s most challenging markets. The team behind the fund have already made a number of investments, including in the country’s first and largest pharmacy chain.
“Private sector investment is the most effective and sustainable form of development in a post-conflict economy such as Afghanistan,” asserts Felix von Schubert, Director at InFrontier Ltd. “This is a landmark Fund that will enable InFrontier to build on three years of investment track record in Afghanistan,” commented Benj Conway, Director at InFrontier Ltd.
“CDC is a pioneering investor with a mandate to invest into some of the world’s hardest places. That’s why we’re backing InFrontier, the team behind Afghanistan’s first private equity fund. This is a tough environment in which to operate but we have been impressed by their commitment, their understanding of the market and their strong local relationships. CDC’s US$15m investment will support the Afghan economy by increasing access to finance, boosting job creation and potentially attracting new private sector investors.” says Diana Noble, CEO of CDC Group.
After over 10 years of international focus and a period of substantial economic growth as a result of unprecedented economic aid, Afghanistan has entered a new phase, focusing on domestic capacity, modernization of urban infrastructure, regional trading relationships and the strength of a young, internet-enabled population, half of which is under 15 years of age.
“The Dutch Good Growth Fund (DGGF) aims to boost access to finance for Small and Medium sized enterprises in underserved markets, particularly in fragile states. We believe that InFrontier can set an example, also for private investors, by demonstrating that market based investments in one of the world’s most challenging countries are possible, thereby contributing to financial ecosystem development and job creation.” says Steven Evers, Managing Director of Triple Jump, Investment Manager of the DGGF
InFrontier will hold additional closings for the Fund with a final closing scheduled for the end of 2017.