African Agricultural Capital Fund

The African Agricultural Capital Fund, managed by Pearl Capital Partners, primarily invests in small- and medium-sized agricultural enterprises to improve the livelihoods of smallholder farmers in East Africa. In September 2011, four members of the Global Impact Investing Network’s Investors’ Council – the Bill & Melinda Gates Foundation, the Gatsby Charitable Foundation, J.P. Morgan, and the Rockefeller Foundation – closed a USD 25 million impact investment into the Fund. The United States Agency for International Development provided a 50 percent debt guarantee to J.P. Morgan’s investment, as well as a grant-funded technical assistance facility

for the fund’s investees.

For more information, the GIIN published a brief case study on the formation of AACF, found here: http://www.thegiin.org/binary-data/RESOURCE/download_file/000/000/424-1.pdf

Financial description

The Fund aims to address the lack of risk capital available to small and medium-sized businesses that serve Africa’s large agricultural community. It invests in companies that offer products and services to small-scale farmers, whose needs differ from large-scale farmers. By maintaining low overheads, out-sourcing operations, and operating in close proximity to communities in order to learn their needs, these companies are able to offer goods and services which are priced at levels small-scale farmers can afford and produce profits. These companies, in part due to their size, and in part due to the risks inherent to the agricultural sector, have historically faced enormous difficulties in accessing capital needed to grow.
The specific investment strategy of AACF includes the following objectives:
● A minimum of 75% of AACF’s investment will be located in Kenya, Uganda, Tanzania, Rwanda and Burundi. Up to 25% can be invested elsewhere in Africa
● No more than 10% of the AACF fund will be invested in any one company (USD 2.5 million)
● The minimum investment size will be USD 500,000 but initial investments above USD 200,000 will be considered if there is a strong potential of follow-on investment