2016 Global Excellence Awards – Best Capital Raise in Africa award winner is Verdant Capital, an investment bank operating on a pan-African basis. We invited them to write about their firm’s vital work in the midmarket financial services sector and their reflections on winning this award.
Our firm Verdant Capital specialises in the mid-market financial services sector, advising and raising capital for specialist banks, non-bank financial institutions, and fintech companies. At Verdant Capital, we also have a generalist corporate finance / M&A franchise. Our firm has been operating for four years and has offices in Johannesburg, Ebene and Accra.
2016 Global Excellence Awards – Best Capital Raise in Africa Verdant Capital advised Trustco group on a ZAR 450 million capital raise. Trustco is the leading financial services, property and investment group in Namibia. The transaction represents the second largest capital raise for a Namibian-owned private company. The transaction was structured to meet the group’s objectives for both senior debt at the main lending entities, Trustco Finance and Trustco Bank, and for structurally subordinated financing raised at the parent level to contribute equity to Trustco Bank and to fund equity required for the property business.
The transaction marks a return to the international funding markets for Trustco following of its bonds on the Johannesburg Stock Exchange in 2013. The transaction is also transformational because of its size, the ZAR 450 million of funding raised by Verdant Capital compares to the group’s loan book of ZAR 750 million at its last year end. New financings of this size facilitate the growth of our clients’ loan books, driving operational leverage and ultimately profits.
We are proud to be associated in the market with Trustco, which is a remarkable institution which has touched the lives of so many ordinary Namibians, as well as having created significant wealth for shareholders (the share price is up 4x in the last 3 years). The funding raised has been directed towards the growth of Trustco’s student loan book, affordable housing and SME-lending. Trustco which had humble beginnings only 20 years ago, has great affinity with the SMEs which will be supported by the latter part of the funding programme.
In addition, we work with the largest specialist financial services investors globally and we have completed transactions with almost all of the leading development finance institutions. Our investors are also ‘sticky money’, not hot money, fast in and out.
In terms of our own people, I would say that the professional development of our team is critical – we are ultimately a people business. Our team members work incredible hard. Each team member has built up a critical mass of experience by completing transactions year in year out.
What sets Verdant Capital apart Verdant Capital is differentiated by (i) its specialism in mid-market financial services and the significant knowledge and expertise this allows us to bring to our clients as a result, (ii) our expertise in crossborder transactions, i.e. bringing the largest specialist investors globally to our clients, and (iii) our expertise transacting in numerous different African markets.
Critical to our business succeeding is the consistency of our work. We bring high quality clients to our investors, following rigorous due diligence on our clients, carefully preparation work and fully thought through transaction structures.
Hopes and plans for the future We expect to reinforce our dominant position in debt capital markets for non-bank financial institutions across the Continent. Actually, we expect our transaction volumes in 2017 to be approx. double our volumes in 2016.
We are also seeing an explosion of high quality fintech companies approach us for assistance raising expansion capital. Fintech in Africa is a critical market which is invested by our clients in Africa and North America.
Opportunities: The financial sector in Africa is being disrupted, not just by technology, but by the expansion of specialist banks and non-bank financial institutions, supported by new sources of capital and staffed with different skills sets to the traditional commercial banks.
Company: Verdant Capital
Name: Ed Higenbottam
Email: ed.higenbottam@ verdant-cap.com
Address: Northview Building 57 Sixth Road, Hyde Park Johannesburg 2196 South Africa