Inside Equity Fund II

Equity : July 2024

BIO has committed USD 5 M to Inside Equity Fund II, a 10-year generalist SME fund focused on Southeast Africa.

Amount

$ 5,000,000.00

Type of investment

Equity

Development impacts

Local economic growth
Private sector consolidation/innovation
Promotion of ESG best practices

Beneficiary locations

Africa:

Investment field

Investment Companies & Funds

Activity

KK.64.300 SME Fund

Organisation

Inside Equity Fund II

Website

https://insidecapital.net/

Domicile

Mauritius

Inside Equity Fund II is a 2024 vintage generalist SME fund managed by Inside Capital Partners. It is the second fund of the Manager, with a view to invest in the underserved Southeast Africa region and help spur the emergence of a private equity ecosystem. The large majority of the investments should support SMEs in LDC.

While the Fund’s strategy is generalist, the manager has developed a strong expertise and interest in agribusiness, clean energy, waste management, manufacturing, pharmaceuticals and financial inclusion. The Fund’s strategy further focuses on the climate, gender, and human rights dimensions.

Development impacts

Local economic growth
Inside Equity Fund II will provide long-term growth capital to SMEs, contributing to job creation and increased tax revenue. It will also help diversify the markets where Inside operates, supporting Import Substitution and Export Diversification.
Private sector consolidation/innovation
Inside operates in a region where equity funding is scarce, particularly for growth-stage SMEs. The fund will typically be the first external equity provider and focus on bringing in institutionalisation at portfolio companies' level.
Promotion of ESG best practices
Inside is committed to keep reinforcing its ESG capabilities, setting the example for Emerging Managers in the region. At portfolio companies' level, ESG is an integral part of Inside's SME institutionalization thesis, with an explicit drive to add value across all three dimensions of ESG.

E&S Impact

An Environmental and Social Action Plan (ESAP) has been prepared, mainly to reinforce the E&S monitoring system of the investees, but also to include actions related to climate change, gender equality and prevention of gender-based violence at a strategic level.

Situation at the time of investment

Inside Equity Fund II has an ESG policy in place which is integrated into their investment process. It has a comprehensive screening system and an exclusion list aligned with EDFI standards. To support their ESG assessments and perform internal E&S due diligence for all their potential investees the fund has developed tools and templates based on IFC Performance Standards.

Risk Category: B