CardinalStone Capital Advisers has secured a $76 million first close for CCA Growth Fund II, giving the West Africa-focused private equity manager substantial early backing for its second growth fund. The vehicle will invest in high-growth small and medium-sized enterprises across Nigeria, Ghana, Côte d’Ivoire and Senegal.
The first close combines support from returning development finance institutions with new commitments from international investors and Nigerian pension funds. CCA Growth Fund II is ultimately seeking to raise $120 million, meaning the initial $76 million represents roughly 63% of its targeted fund size.
Key Overview
- CCA Growth Fund II has reached a $76 million first close against a $120 million fundraising target.
- Nigeria, Ghana, Côte d’Ivoire and Senegal will serve as its principal West African markets.
- Returning investors include IFC, British International Investment and SCM Capital.
- New backers include Dutch Good Growth Fund, CardinalStone Partners and three Nigerian pension managers.
- The fund will invest in sectors including agribusiness, industrials, consumer businesses, healthcare, education and financial services.
- CCA says its first fund committed capital to seven SMEs and helped enable more than 8,000 jobs.
Institutional Investors Back West African SMEs
The fundraising brings together development finance institutions, international investors and domestic African institutional capital at a time when access to long-term equity financing remains a significant constraint for many growing businesses in West Africa.
Returning investors from CCA Growth Fund I include the International Finance Corporation, British International Investment and SCM Capital. They are joined by Dutch Good Growth Fund and CardinalStone Partners, alongside Nigerian pension managers Stanbic IBTC Pension Managers, Access ARM Pensions and FCMB Pensions.
The participation of local pension funds is notable because one objective of development-backed private equity vehicles is to mobilise more domestic institutional capital into productive businesses. The fund’s first-close investor mix therefore provides CCA with capital from both international development investors and domestic pools of long-term savings.
IFC’s involvement had been under development before the first close. Its investment disclosure shows an approved indicative equity investment of $15 million, with the institution viewing its participation as a means of attracting additional investors and increasing access to growth capital for smaller companies.
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Fund II Targets a $120 Million Final Raise
CCA Growth Fund II is targeting total commitments of $120 million, meaning further fundraising will be required following the $76 million first close.
The fund is structured as a generalist investment vehicle and intends to make equity and equity-linked investments in SMEs. Nigeria and Ghana are expected to receive significant attention, while Côte d’Ivoire and Senegal provide opportunities to expand the strategy further into Francophone West Africa.
Its investment mandate spans several important sectors. CCA has identified agribusiness, industrials, consumer goods and services, healthcare, education and financial services as six priority areas for the manager.
The strategy is designed around backing companies that have moved beyond the earliest stages of development but still require institutional capital, operational support and stronger governance to scale. CCA aims to help these businesses develop from local SMEs into larger regional companies.
Building on CardinalStone’s First Fund
Growth Fund II follows a predecessor vehicle that established CCA’s strategy across West African SMEs. The first fund closed at approximately $64 million in 2021 and typically pursued growth investments in businesses operating in markets such as Nigeria and Ghana.
CCA says the predecessor fund made commitments to seven SMEs. Through those investments, the manager reports that it helped enable more than 8,000 jobs while supporting an additional 1,000 SMEs throughout portfolio-company value chains.
Those results form an important part of the investment case behind the second fund. Growth Fund II is intended to continue the strategy while operating with a potentially larger pool of capital and a broader geographical reach.
The new vehicle is also 2X qualified, reflecting CCA’s stated emphasis on shared prosperity, enhanced equity and environmental sustainability. The combination of commercial return objectives with development priorities helps explain the participation of development finance institutions alongside private institutional investors.
Domestic Capital Adds Weight to the Fundraising
One of the more significant elements of the first close is the presence of Nigerian pension funds. African private equity fundraising has historically relied heavily on international development institutions and overseas investors, making deeper participation from local institutional investors important for building more self-sustaining capital markets.
CCA’s leadership team — Femi Ogunjimi, Yomi Jemibewon and Shirley Somuah — has highlighted the domestic participation as an important part of the fundraise. With $76 million now secured, the manager enters its next fundraising stage with most of its $120 million target already committed.
If the remaining capital is raised, Growth Fund II would be substantially larger than its predecessor and give CardinalStone greater capacity to finance companies seeking to expand beyond their domestic markets. Its progress will also provide another test of whether development institutions and African pension capital can increasingly work alongside each other to finance the region’s growing mid-sized businesses.
Sources: Africa Private Equity News / International Finance Corporation / Public Technologies / Ecofin Agency
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