New Delhi, June 30 -- TLG Capital, an Africa-focused alternative asset management firm headquartered in London, has marked the second close of its second fund that is targeting to raise a corpus of $200 million.
The private credit fund manager, which provides debt to small-and-medium enterprises in Sub-Saharan Africa, has secured capital commitments worth $120 million for TLG Africa Growth Impact Fund II (AGIF II) from limited partners in Europe, America and Africa, the firm said.
The second close was led by Proparco, the private-sector financing subsidiary of France's public financial institution Agence Francaise de Developpement, and Calvert Impact Capital, a subsidiary of US-based global impact investor Calvert Impact, alongside six additional new investors. Its other LPs include African reinsurance corporation Africa Re and Tsao Family Office.
The fund has attracted 22 investors, with increased allocations from several investors who participated in the first close including Swedfund. The Swedish development finance institution recently exited from TLG's first fund and increased its allocation to the second fund.
The African manager had marked the first close of AGIF II in April last year after raising $75 million. International Finance Corporation (IFC), the private-sector investment arm of the World Bank Group, had committed to invest $20 million at the time, along with Swedfund, Norfund, Bpifrance, and the UK Foreign, Commonwealth & Development Office (FCDO) through its Manufacturing Africa program.
The fund has already invested in nine SMEs across seven sectors in seven countries since then.
AGIF II disburses capital through a proprietary approach called BOMA-Bank Originated & Mitigated Assets-where TLG originates loans to African SMEs directly through local banking partners across the continent. The loans are structured with a longer tenor than African banks typically offer and is backstopped by a guarantee from the originating bank. Its cheque size ranges from $5m to $15m to each company.
Founded in 2010 as a holding company, TLG Capital initially pursued private equity deals before shifting to private credit in 2016, citing high borrowing costs, limited exit routes, and currency volatility as barriers to scaling PE in Africa.
The firm targets Africa's least developed countries, promoting gender equality, local ownership, sustainable industrialization and decent work. Its first fund was launched in 2016 and raised capital entirely from family offices and HNIs. The second fund has DFIs contributing about 48% of the corpus so far.
Published by HT Digital Content Services with permission from VC Circle.