DBG sets up Fund of Funds to support Venture Capital and Private Equity firms

At the recently held Ghana Venture Capital Association (GVCA) Annual Conference 2024, the Deputy Chief Executive Officer of Development Bank Ghana (DBG), Mr. Michael Mensah-Baah, disclosed that DBG has established a fund of funds designed specifically to support Venture Capital and Private Equity Firms.

Mr. Mensah-Baah who was delivering the keynote address at the conference intimated that the fund of funds serves as a critical tool in DBG’s strategy, which allows the Bank to channel investments into selected venture capital and private equity firms that demonstrate strong potential to drive sectoral growth.

The GVCA Annual Conference is an innovative conference which provides a platform for a diverse range of stakeholders including Limited Partners, General Partners, Investment Banks, Pension Houses, Insurance Companies, Business Owners and Small and Medium-sized Enterprises (SMEs). The 2024 edition sought to bring together industry experts to discuss and share ideas on the venture capital and private equity business landscape.

In Ghana, Venture Capital and Private Equity firms have played a critical role in the transformation of the economy although there have been some ecosystem challenges. These include small ticket sizes, poor corporate governance culture, unwillingness of SME entrepreneurs to partner and share their boardrooms and control of their businesses as well as low exit track records.

That notwithstanding, the important interventions of venture capital and private equity firms in injecting capital into budding enterprises, particularly SMEs, in a bid to transform ideas to real viable businesses cannot be underemphasized.

According to Mr. Mensah-Baah, “support from Venture Capital and Private Equity often help businesses to improve their corporate governance, and it further leads to increased efficiency, enhanced competitiveness and enhanced Environmental, Social and Governance principles and practices. By injecting fresh capital and implementing best practices, they help Ghanaian businesses become more resilient, agile, and sustainable in the long run”.

In his key note address, the Deputy CEO of DBG remarked on how the theme “Capital Convergence: Bridging Traditional and New Financing Landscapes” resonated with DBG’s mandate. He said “addressing the lack of long-term financing that drives the kinds of investment that will lead to sustainable growth, is a gap that must be addressed. That is why we in DBG share the importance of today’s deliberations”.

As Ghana’s only development finance institution, DBG is mandated to accelerate an inclusive and sustainable economic transformation by fostering the growth of a competitive sector. The Bank achieves this by ensuring that sufficient long-term capital is allocated toward the productive sectors of the economy such as agribusiness, manufacturing, ICT, and high-value services.

Mr. Mensah-Baah noted that in addition to the long-term capital, DBG has also established a fund of funds to provide Venture Capital and Private Equity firms with the necessary capital which will enable them to make substantial investments across diverse sectors such as technology, healthcare, and green energy, thereby amplifying their impact on Ghana’s economy.

He added that “Through our shared goal of supporting the growth of local businesses, we hope to contribute to an economy where entrepreneurs can invest and build sustainable businesses that can take their products and services across West Africa and globally”.

Mr. Mensah-Baah also used the opportunity to announce the upcoming 3i Africa Summit scheduled for May 13 to 15, 2024 in Accra. The summit, which is an initiative of DBG, Bank of Ghana and the Monetary Authority of Singapore will similarly bring together venture capital and private equity entities, impact investors, insurance companies, family offices, sovereign wealth funds, pension funds, FinTech companies, Development Finance Institutions (DFIs), policymakers and regulators to foster collaboration and innovation in driving sustainable economic growth.

The Ghana Venture Capital and Private Equity Association is dedicated to assisting small and medium-sized enterprises (SMEs) in securing capital to enable them to grow, provide employment, and promote economic expansion. Their presence safeguards investors and investees, provide industry practitioners with a strong voice in lobbying and stakeholder engagement, encourage industry growth, lends legitimacy to its members, and increases the capability of industry players.

Development Bank Ghana is a wholesale financial institution established by the Government of Ghana. DBG acts as a provider of long-term capital to the market with a mission to foster strong partnerships to finance economic growth, create jobs, and build capacity for SMEs. The organisation is committed, aligned and strengthened to achieve the UN Sustainable Development Goals (SDGs) ambitions and targets while implementing environmental, social, and governance (ESG) strategy aimed at creating shared value and impact with purpose. The Bank has received funds from the World Bank, European Investment Bank, Kreditanstalt Für Wiederaufbau (KfW), and the African Development Bank.

Source: Norvanreports