Last updated 13 May 2020, by Impactyield.
Emerging countries (256) / Africa (127) / Middle Africa (17)
Summit Development Group ("SDG") is a private equity fund based in Botswana, with offices in Johannesburg and London. SDG invests in banks across sub-Saharan Africa and transforms them to focus on the Missing Middle: SMEs, unbanked and low-cost mortgage finance.
SDG is unique compared to other private equity funds because it builds value by providing hands on support to its investees and transforming them to become successful banks with strong leadership, performance culture, strong governance, high profitability and efficient operations that service the Missing Middle. Ultimately, we aim to aggregate our investments into a pan-African network of leading Missing Middle banks that will be attractive to a trade buyer. The SDG team and investment committee members have over 140 years combined experience in banking and FIs in Africa and emerging markets with a track record of delivering on the ground results and attractive returns to shareholders.
Alongside the capital for investment, SDG is raising a pool of technical assistance money to support capacity building at the bank level and to provide training and mentoring support to SMEs. By transforming the banks and supporting their customers, SDG provides both financial and social returns for investors looking to contribute to economic growth and development in Africa. Over 10 years, SDG looks to reach 5 million unbanked customers, finance over 190,000 SMEs and create 1.4 million jobs.
SDG targets small and mid-size commercial banks with total assets on average between US$50 and US$150 million. The targets include development banks, commercial banks, leasing companies, microfinance banks and related financial services companies. Typical initial investment size ranges from US$2 million to US$15 million, with a maximum investment size of 20% of total investable capital (US$25 million if US$125 million investable capital).
Characteristics of investment targets include:
• Potential for developing Missing Middle customer base
• Sub-optimal performance in one or more areas, including management, governance, portfolio management and operational efficiencies
• Requires strengthening in key areas to expand business
• Clear opportunity for value creation
• Clear prospect of economies of scale
• Price justification in light of value creation
Acquiring effective management control is crucial to facilitating the transformation process at the FIs. SDG seeks to achieve majority in one of the following ways:
a) outright on its own or with like-minded investors
b) conditionally within five years from the time of an agreement to purchase a stake
c) in the case where regulations restrict a single investor to shareholding limits, SDG will invest alongside like-minded investors to obtain at least 51% and establish shareholders agreement with them to establish effective management control.
of track record
the year funded
Key performance indicators
Asset manager: Summit Development Group
Product track record: Fund has 15 years of track record
Target IRR: 20%
Committed Capital: 30,000,000 USD (US Dollar)
Target return category: Risk-adjusted market-rate of return
Fund domicile: Botswana
Product status: Open - committed capital
Style/Stage: Growth Stage
Inception year: 2008
Vintage year: n.a.
Target region: Africa, Emerging countries, Middle Africa
Target close date: 01/09/2011
Product term: 10 years
Assets under management: 125,000,000 USD (US Dollar)
Investment size: Min: 2,000,000; Max: 25,000,000; Avg: 5,000,000
Co-investment policy: LPs have priority, With LPs and non-LPs
Currency of investments: USD (US Dollar)
Currency for fund / product figures: USD (US Dollar)
Fund investments to date: 0
Fund investments to date exited or repaid: 0
Management fee: 2%
Carried interest: 20%
Hurdle rate: 8%%
GIIN Investors' Council Investment: Yes
Limited Partners / Investors: African Development Bank - http://www.afdb.org/en/ Lundin Foundation - http://www.lundinforafrica.org/s/Home.asp
Limited Partner / Investor Type: Development Finance Institution (DFI), Family Office, Other Institutional Investors
Phone number: +44 (0) 207 636 9571
If you wish to have your details removed from this database please email email@example.com
SDG has identified the following three goals to achieve social impact:
1: Create market leaders for SME, unbanked and housing finance
2: Develop supply of market-led financial services to Missing Middle markets
3: Strengthen the performance of SMEs
To support our development goals, SDG has a Technical Assistance (TA) Facility that will disburse grant funding to investee FIs for specific projects that enhance the FI capabilities as a leading Missing Middle bank and that strengthen the performance of their SME clients.
Investing in financial intermediaries allows SDG to have a multiplier effect in the communities where its banks operates and allows SDG to have a greater impact. Over 10 years, SDG aims to deliver development returns through several dimensions:
•Expansion of access to finance for lower and middle income groups : SDG aims to reach 5million previously unbanked customers and finance 190,000 SMEs.
•Deepening of financial markets and enhancing country financial structure: SDG will transform 12 banks to become leaders in providing Missing Middle finance and deploy $3.8 billion in loans to SMEs.
•Strengthening capacity of banks and SMEs: SDG will develop leadership at banks by providing training to at least 200 employees and provide mentoring to SMEs.
•Creating new jobs through FI expansion and SME growth: SDG aims to create 1,200 jobs at banks and 1.4 million jobs at SMEs.
Community Investing/LocalMinorities/Previously Excluded PopulationsRuralWomen