African mezzanine deal makes 35% return

Johannesburg-based Vantage Capital, the largest mezzanine manager in Africa, has made a return of more than 35 percent from its investment in New GX Capital, a black family-owned investment holding company also based in Johannesburg.

Vantage had provided $20 million to New GX in 2016 to finance follow-on investments in telecommunications infrastructure, waste management and information technology. New GX went on to double its net asset value over the two years of Vantage’s investment, according to Vantage associate partner Mokgome Mogoba.

The latest exit is Vantage’s eighth across three mezzanine funds and brings the aggregate money multiple across those funds to 2.0x. Managing partner Luc Albinski cited open access fiber provider Vumatel and facilities management firm Servest as two other examples of strong returns.

“These results support our view that well selected and structured mezzanine debt deals can generate returns that rival traditional private equity returns with less downside risk,” said Albinski in a statement.

The New GX investment came from Vantage’s Fund III, which closed with commitments of $280 million in March 2017. It had previously closed Fund II on $240 million in March 2012 and Fund I on $150 million.

The firm was founded in 2001, has offices in Johannesburg and Cape Town, and also invests in renewable energy.