Voices from the USAID Finance and Investment Network: Lion’s Head Global Partners
Lion’s Head Global Partners, a leading investment bank focused on capital market development in emerging and frontier markets, is working with USAID INVEST on a number of activities, including supporting an innovative Fund of Venture Capital Funds in South Africa, which aims to increase investment into Black-owned and operated small and medium-sized enterprises by investing in venture capital funds across the country. In this interview, Lion’s Head Director Jasper Siegfried discusses the firm’s experience working with USAID, what makes the SA SME Fund of Venture Capital Funds innovative, and the Fund’s anticipated development impact.
By Emily Langhorne, INVEST Communications Specialist
“Our core focus is on developing local capital markets and attracting capital into frontier markets, which we do both through our asset management arm and our financial advisory and corporate finance business,” explains Lion’s Head Director Jasper Siegfried. “We combine broad cross-sector expertise and local capital market experience with our relationships and investor network, which spans Europe, Africa, the Middle East, and the Americas. While most of us have backgrounds in finance, we also bring specialist knowledge of key development sectors and an understanding of the donor world. We believe that USAID recognizes that this combination is key to driving catalytic development impact in its focus geographies.”
Lion’s Head has worked on numerous activities with USAID. Most recently, the firm has been partnering with INVEST to support the development of a Fund of Venture Capital (VC) Funds managed by the SA SME Fund — a standalone investment vehicle managed by an experienced executive team, which focuses on channeling capital into South Africa’s small and medium-sized enterprises (SMEs).
Put simply, a fund of funds structure is a fund that invests in other funds and can thereby offer greater diversification in terms of sector, stage of investment, and fund manager experience, which results in less volatility and more stable investment returns. The SA SME Fund of VC Funds raises capital from South African and international investors to invest in funds that channel venture capital to entrepreneurs and SMEs across South Africa. With a strong focus on Black economic empowerment, the Fund of VC Funds requires its underlying funds to invest at least half of their capital in Black-owned and/or operated businesses.
Siegfried believes that working with USAID and INVEST provides a chance to work on activities with significant impact in frontier markets, and he encourages other transaction advisory firms to keep an eye out for opportunities with USAID programs. “There is a very broad range of specific sector and geographic expertise needed to tackle the issues we are facing, and INVEST has proven that USAID can adapt to specific gaps they see in the market and draw on specific expertise from across the world to unlock the full socio-economic potential in emerging and frontier markets, and support sustainable and inclusive growth,” he says.
INVEST’s work with the SA SME Fund is funded by USAID’s Southern Africa Regional Mission in support of Prosper Africa, a U.S. Government initiative designed to boost two-way trade and investment between Africa and the U.S.
“The work with USAID under the wider umbrella of the Prosper Africa initiative has shown the value of close connections between different U.S. Government agencies, which Prosper Africa has really enabled,” says Siegfried. “These connections result in quick introductions and the creation of links between different activities that are aligned across agencies, which in the end benefits the activity itself and the U.S. Government.”
Check out the video below to hear learn more from Siegfried about the structure of the Fund of Venture Capital Funds, its potential development impact, and how USAID is driving private sector engagement forward throughout emerging markets.