PearlCapital to launch $30 million Agribusiness Investment Fund in Uganda in 2016

Deloitte and PearlCapital have revealed that Uganda will be the lucky recipient of a $30 million agribusiness investment fund in 2016. The fund code-named; "Small and Medium Agribusiness Development Fund" is targeting 20-30 SMEs in Uganda. Speaking about the fund, Tom an official from PearlCapital revealed that additional employment and improved access to markets for 26,000 will be the target impact metrics. 

PearlCapital has invested in substantial seed companies among which is KK fresh produce and Bee Natural Uganda. Their

model is to invest risk-capital in the sector while working actively with the investees. 

"Although we are an impact investing business, we measure our success depending on a number of metrics such as employment but we also consider the financial criteria. We structure our investment to give our invests the best chance of success but also ensure best ROI for our investors," PearlCapital clarified. 

Quick Summary of the Fund 

PearlCapital is in a consortium with Deloitte and EU. 

It is going to be a $30 million investment fund. $18 million to be invested by DFI, public and private sector. 10 million euros will be invested by European Union. 

The fund is targeting 20-30 SMEs. 

Target Impact Metrics

-additional employment

-improved access to markets for 26,000 farmers 

We will have our own BDS matching facility, providing technical assistance to those we are funding. 

What they are looking for:

1. Investors: DFIs, Public and Private to invest $18 million
2. Investees: Ugandan based SMEs involved in Agribusiness to invest $200,000 up to $2 million

Investees: SMEs involved in Agribusiness

We will base our assessment on the following

1. Firms with less than 500 employees
2. Firms with annual turnover of less than 100 USD million
3. Total assets up to 50 USD million
4. Equity of up to 10 million
5. SMEs with sound governance systems
6. producers, processors, importers, exporters, 
7. Value chain partners up and down streams 

Questions and Answers

Q: What is the role of Deloitte in this?

A: Deloitte are the lead partners in the consortium to raise capital and lay the initial structures of the fund. 

Q: Do you work with the cooperatives or you only work with individual companies?

A: Yes, we haven’t in the past but it is important that we do so. Cooperatives present a challenge to the investors largely because of their structure. Perhaps in some sort of differed participating loan. 

Q: Where do we find you? What are the minimum qualifications for one to get funding? 

pearlcapital.net 

What we are really interested is who, what and how. Who is managing the business, what is the business, what selling point does it have. How does the management implement that plan. We want to see people that we believe in with a good quality plan. When we come to do due diligence, we need to see all kinds of evidence. We don’t want to be driven by ticking bosses. We want to be driven by people and their ideas. There’s no real criteria on size. 

Q: Does it include joint ventures?

A: Yes we can invest in joint ventures. As long as the investment structure is right.

Q: You said you can fund companies at early stage. Can you consider in future to fund startups and ideas? 

A: Startups are extremely difficult to invest in. Two of our most successful investments though were startups. Gives an example of a Tanzania startup. However we have to look very careful on our investment appraisal and ensure that the alignment is right and the business model of the startup has worked somewhere else. Startups are risky and we can’t do many of them.