Africa-Focused Private Credit Fund Seeks to Raise $200M by 2026

TLG Capital, an investment fund dedicated to Africa, aims to raise $200 million to provide credit to small businesses across the continent.

Aum Thacker, the investment manager at TLG Capital, stated that the firm expects to complete its fundraising efforts by the end of next year. The TLG Africa Growth Impact Fund II raised $75 million successfully in April, with support from the International Finance Corporation.

In an interview, Thacker mentioned that each “dollar of fund we provide” creates a $3 impact, as it allows banks to enhance their lending capabilities. An investment of $200 million could potentially translate into $800 million to $1 billion in investments throughout the continent.

Private credit funds are essential in offering financing to small enterprises that find equity financing too costly from the continent’s restricted capital markets or struggle to secure bank loans. TLG anticipates closing up to six deals this year, having previously completed over 40 transactions in the past 13 years, according to Thacker.

TLG Capital provides a mix of refinancing and growth capital, with terms of up to seven years, which may include a three-year grace period on principal repayments for certain agreements.

Last year, the London-based TLG Capital assisted FCMB Asset Management in Nigeria in raising 10 billion naira from 16 pension funds, marking the first issuance of private credit in the West African nation.

Thacker highlighted that FCMB “deployed all funds within six months,” stressing the significant demand in the current market, especially in Nigeria, where the cash reserve requirement is high and banks encounter liquidity issues due to monetary policy.

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