CDC invests $5m in Sierra Leone private equity fund

The Sierra Investment Fund (SIF) targets small and medium businesses, as well as start-ups, and aims to make six to eight investments worth between $20m and $30m over the next few years, with deal sizes varying from $1m to $5m.

The fund is run by ManoCap, an SME-focused fund manager based in Sierra Leone, Liberia and Ghana.  Through SIF, the firm makes investments of between $500,000 and $5m in all sectors except mining. The firm also manages the ManoCap Soros Fund, which targets agribusiness and related investments in the country.

Sierra Leone has experienced strong post-conflict growth, averaging seven per cent over the last five years despite a chronic shortage of credit. However, foreign investment has  predominantly come from donors and non-governmental organisations, with private investors put off by Sierra Leone’s tumultuous history and poor infrastructure.

CDC CEO Richard Laing said, “Our investment in this fund will offer a rare opportunity for SMEs. There is significant untapped potential in many sectors in Sierra Leone where underinvestment and low levels of competition have resulted in limited choice and poor services for its people.”

CDC is a UK government-owned development finance institution, which invests according to the Department for International Development’s strategies to facilitate private sector development in emerging and frontier markets. The $3.8bn financier is Sierra Leone’s most significant donor, contributing $80m last year.

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