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By Benedicte Gravrand, Opalesque London: Following the success of its African commodities trade finance fund, South African manager Heriot is launching the Heriot African Special Opportunities Fund this month. The initial target size of the new fund is $75m (of which $20m has already been soft circled) and the closing is expected to take place at the end of October.
This new fund will provide expansion capital to commodity producers in Africa, many of whom are already receiving trade finance from Heriot, and aims to achieve unlevered annual returns in excess of 40% net to investors. It has a one year lock-up, followed by semi-annual liquidity.
Heriot launched an African trade finance fund (Fund I) in July 2007 which has focused on providing trade finance to mid-sized independent mining companies in South Africa. Fund I raised assets totalling $82m, returned 7.30% in 2007 and 23.93% YTD (to August).
Whereas Fund I provides trade finance to fund the product from the producer to the customer, Fund II provides capital for the purchase of equipment to increase production by upgrading existing plant and equipment, or purchasing new plant and equipment, as well as working capital to fund business development.
The Heriot African Special Opportunities Fund (Fund II)'s initial target markets include manganese, chrome, sugar, cocoa butter and iron ore -markets in which Heriot already has ongoing projects and ex...................... To view our full article Click here
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