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The number of infected Nigerians is rising daily, notwithstanding, this development is not discouraging impact investors from doing what they know how to do best, which is to make investing moves that guaranty returns and socially sustainable.

Gbenga Hassan is the Managing Partner, Àrgentil Capital Management Limited. His firm is currently raising a $95m SME fund which will expand their impact investing activities
to countries in West
Africa, especially Nigeria, Ghana, Liberia and Sierra Leone. He elaborates on the achievements of his firm and the nature of the impact investing landscape in Africa in this interview with TELIAT
SULE. Excerpts-

Kindly provide an overview of Africa’s impact investing landscape with a specific focus on countries where your organisation has investments?

Impact investing refers to private capital investing which targets financial return and social/environmental objectives. The Rockefeller Foundation was a pioneer of the term while development
finance institutions (DFIs) such as the International Finance Corporation (IFC) have driven the development of frameworks for setting out and measuring impact investing. The IFC’s Operating
Principles and similar frameworks from other DFIs have contributed to the momentum of impact investing. Given the important role DFIs have played with crowding in private capital investing in
Africa, there has generally been an alignment of meeting impact objectives and making financial returns by private equity investors in Africa. This has further been developed with the participation
of private investors, many with philanthropic mandates, who are keen to see private capital go towards supporting underserved regions/markets in a sustainable way i.e. the investment does social
and environmental good and is profitable so that it can continue over time.

Africa is a good example of a continent that sees congruence between challenges and opportunities. The continent faces significant challenges related to poverty, health, education, nutrition, etc.
It is home to more than 70%of the world’s poorest people, while under-five mortality rates are significantly higher than global average. Conversely, Africa has 5 countries represented in the 10
fastest growing economies and second highest GDP growth globally.

Àrgentil Capital seeks to make impact investment where clear gaps exist in Africa today including sectors such as agribusiness, consumer goods, and services, energy, and technology. Through this
investment, the firm will ensure delivery of services to support reduction in hunger, provision of clean energy for power and cooking, product and services that support inclusive growth. In
addition, our investments cover countries like Sierra Leone and Liberia which are underserved and fragile economies.

What is unique about Argentil Capital?

We are a firm with significant experience financing completed transactions in excess of $5 billion. Many of these have been first of a kind deals and demonstrate an innovative approach to completing
transactions.

The team also has the unique experience of establishing and operating businesses in sectors in the regions we invest in, providing in-depth knowledge of what entrepreneurs and SMEs face in financing
and completing deals while creating value for investors

Àrgentil’s uniqueness is captured in the following:

• Entrepreneurial experience in target sectors in the investment region
• Strong team operational experience to drive value addition for investee companies
• Team members are from key markets in the region with strong relationships and networks
• Targeting investments that adopt creative approaches to serve existing markets

For how long has your organisation been engaging in impact investing, what are your focus sectors and why those sectors?

Impact has been embedded in our investment thesis from the outset with an investment criterion focused on achieving social and environmental targets with strong financial returns. Our initial credit
fund was started in 2012, to support SMEs with financing where many were unable to access lending from banks. We worked with some of the SMEs and contributed to developing their sustainable
development model which involved one company joining the UN Global Compact to align its business objectives with the ten universally acceptable principles.

This has expanded to focusing on making investments in SMEs serving the lower end of the pyramid or climate change mitigation by supplying cleaner energy for power generation or cooking. We remain
focused to ensure our investments stimulate economic activity, job creation, and portfolio companies have a positive impact on their ecosystems.

Viewing the impact strategy through the United Nations Sustainable Development Goal lens, our general impact objectives are linked to Goal 1 – End poverty in all forms everywhere; Goal 7 – Ensure
access to affordable, reliable, sustainable and modern energy for all; Goal 8 – Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all;
Goal 9 – Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation, and Goal 13 – Combat climate change and its impacts.

The impact strategy will also consider Goal 5 – Achieve gender equality and empower all women and girls by applying a gender lens in evaluating portfolio companies hiring practices and making recommendations for gender-balanced teams. This strategy aligns with our target sectors in Agribusiness, Consumer Goods and Services, Energy, and Technology.

Àrgentil Group (“Àrgentil”) recently partnered with our portfolio company TEMPOHOUSING NIGERIA LIMITED and other leading firms in their fields including 54gene , Wild Fusion Limited and ARNERGY SOLAR to develop and deploy a mobile COVID-19 testing laboratory with the first being deployed in Ogun State, Nigeria. The mobile lab is environmentally friendly in terms of build and energy supply and will allow testing to be done across the state. The partners are working on additional deployments across different states towards making testing more accessible to people in Nigeria.

This forms part of Àrgentil Group support to a number of initiatives to help with the healthcare emergency created by the COVID-19 pandemic. This has seen us also provide financial resources to pay for a full complement of medical staff at one of the newly built medical facilities in Lagos State as well as support with contributions to help those affected by the economic impact of the pandemic.

Àrgentil Capital Partners (“Àrgentil”) is providing support to a number of initiatives to help with the healthcare emergency created by the COVID-19 pandemic. This has seen us provide financial resources to pay for a full complement of medical staff at one of the newly built medical facilities in Lagos State as well as support with contributions to help those affected by the economic impact of the pandemic.

We also recently partnered with our portfolio company Tempohousing Nigeria (“THN”) and other leading firms in their fields including 54gene, Wild Fusion and Arnergy Solar limited to develop and deploy a mobile COVID-19 testing laboratory with the first being deployed in Ogun State, Nigeria. The mobile lab is environmentally friendly in terms of build and energy supply and will allow testing to be done across the state. The partners are working on additional deployments across different states towards making testing more accessible to people in Nigeria.

This is in line with Argentil’s investment philosophy of supporting and partnering with indigenous entrepreneurs to provide solutions to help fast track Africa’s development. Àrgentil focuses on making investments that help generate positive social and developmental impact and is actively investing to support the growth of businesses in West Africa. The firm’s first fund, Àrgentil Principal Investment Portfolio (APIP I) completed 8 investments which have been fully exited. A follow on fund, APIP II has made 3 investments including THN.

THN provides sustainable solutions in Nigeria by repurposing shipping containers for residential and commercial use, thus addressing Africa’s infrastructure challenge in an affordable and environmentally conscious manner. The spaces developed by THN are taken up by lower income earners, young professionals, students, SMEs and other sectors of the economy where high traditional build and land costs in the cities makes it difficult for many participants in the economy to access quality living and commercial work spaces.

The disruptive impact of THN’s solutions was acknowledged when Àrgentil received Private Equity Africa’s Deal of the Year (Small Cap) 2019 for the THN investment

Argentil is pleased to have advised Sygen Pharmaceuticals Limited, (a consortium comprising Uhuru Capital Limited and Brandocean Nigeria Limited), on the acquisition of the assets of Nigeria German Chemicals Plc.

Àrgentil wins Small Cap Deal of the Year Award at the 2019 Private Equity Africa Awards for its investment in Tempohousing Nigeria (THN). Àrgentil’s investment in THN supports the use of cargotecture technology to help provide affordable housing solutions and innovative commercial spaces for the Nigerian market.