Investment opportunity

The finance gap for small and medium sized enterprises
The fund targets the gap between micro finance and current, larger, private equity activities. This segment is currently served only by banks, at punitive rates. InReturn believes the market holds significant potential for a private equity operation.

InReturn invests between € 100k and € 1m for stakes up to 50%. The fund will drive value through entrepreneurship, active training, coaching and consulting, as well as leveraging access to new markets and support services from Western entrepreneurs, NGOs, development organisations and East African banks.

Strong economic outlook for East Africa
Kenya, Uganda and Tanzania are part of the East African Community (EAC), a customs union covering over 100 million consumers, or 11% of the African population. Macro economic growth outlook for 2010-2011 is still 4 % after correcting for economic crisis (source: IMF).

Exit opportunities
Allocation of each investment into equity or mezzanine will depend on the risk and expectations of perceived exit opportunities at the structuring stage. For companies with sufficient free cash flow, mezzanine debt will create its own exit. For equity strategic trade sales is the most likely exit route. Sales to venture capital funds focusing on larger deals and ‘over the counter’ (OTC) listings on the local stock markets also are foreseen.