What We Invest In
At a high level, Agaciro Development Fund seeks to invest in market leaders or defensible niche players that generate economic impact including via export orientation or import substitution, domestic value addition and employment creation.
Investment
What We Invest In
Equity
We seek mid-stage growth companies that seek growth capital within Rwanda and outside Rwanda. We also seek to partner with fund managers who have established track records. We are looking for profitable, cash generating companies that have the capacity of declaring and paying a dividend within the short to medium term.
We shy away from greenfield investments unless they are significantly de-risked through offtake supply implementation. We look for companies that have strong management and governance practices, with boards and audited financial statements.
Companies should have the capacity to scale and crowd in other sources of capital outside of Agaciro Development Fund. We look at companies that have been in operation for at least 3 years and should have been profitable for at least 2 of those 3 years, including the most recent year. Their EBITDA should be at least Frw 3 billion, generating a revenue of at least Frw 10 billion. The company should also be cash or near-cash generative.
In terms of ticket size, we look at an investment of about Frw 10 billion and the company should demonstrate the capacity to absorb it within one year. While there is no specific requirement in terms of the shareholding in companies we invest in, we need to have significant influence and oversight. As such, we look at tickets of at least 10% in the companies we invest in and board representation in them. We are also able to invest through syndication and co-investment structures.
Debt
Under fixed income, what we invest in:
- High quality yielding assets with significant downside protection. We consider a margin above the debt service coverage ratio of at least 1.3 times, debt-to-EBITDA of a maximum of 3 times, a debt-to-equity ratio specific to the industry, cash flow generation capacity of the business, and align the debt requirement to the generation of the business.
- Companies that have earnings that are naturally hedged against US Dollar depreciation.
- Public and sovereign debt, domestic and offshore.
- Supranationals.
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Our Investment Approach
As Rwanda's long-term development focused sovereign wealth fund, Agaciro Development Fund seeks to execute commercially attractive investments that drive development in sectors aligned with the National Strategy for Transformation 2 (NST2).
Read moreDevelopmental Impact and ESG
Agaciro supports Rwanda's national development objectives and aligns its investment activities with the priorities of the National Strategy for Transformation 2 (NST2). Investments will seek to generate sustainable financial returns while contributing to sustainable livelihoods and Rwanda's long-term economic transformation.
Read moreInvestment Process
We have a rigorous top-down and bottom-up investment approach which follows a multi-stage screening and two-stage approval process that extends from the investment team to the board investment committee.
Read moreInvestment Risk Management
Investment risks relate to Agaciro's asset-by-asset view of risks, leveraged to evaluate whether individual investments are performing and whether risky positions are being adequately compensated for.
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