Kholo Capital reached a final close of R1.4 billion in commitments for its Mezzanine Debt Fund. The money raised in the round will enable the organisation to make long-term mezzanine debt investments in small to medium-sized enterprises (SMEs) in Southern Africa.
The debt fund provides growth capital, BEE financing and acquisition funding into various sectors such as social housing, healthcare, education, renewable energy, food, ICT, financial technology and infrastructure in Southern Africa.
Zaheer Cassim, founder and managing partner at Kholo Capital, added: “Mezzanine debt funding is non-dilutive by nature and is an attractive funding option for family-owned businesses, BEE companies or any business that needs to raise capital and hold onto the equity in the business.”
“With banks becoming more risk averse, lending to SMEs has reduced, creating a great opportunity for flexible mezzanine debt structures. We are grateful that our investors recognise the opportunity and have shown us tremendous support.”
Kholo Capital is a majority black-owned and managed fund management business. The company has invested in excess R57 billion of capital in over 110 transactions across more than 12 African countries.
TheKholo Capital Mezzanine Debt Fund has an investment size of between R50 million to R225 million and tenor of 4-7 years. The company makes cash contributions in the form of interest payments and self-liquidating equity upside on maturity providing a definitive exit.
The company says it has a preferred ticket size of R70 million to R200 million per investment.
“We are excited at the opportunity to bring creative funding solutions to the Southern African market and to form long term sustainable partnerships with businesses over a four to seven-year investment horizon,” concluded Co-founder of Kholo Capital Mokgome Mogoba.
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