The Federal Government of Nigeria has received financing from the African Development Bank, Agence Française de Développement and the Islamic Development Bank towards the cost of the Investment in Digital and Creative Enterprises (iDICE) Programme and intends to apply part of the agreed amount of this financing to capital calls under the contracts for three (3) Equity Fund Managers.
The services included under this project include designing, establishing and managing of specific equity fund vehicles targeted at innovative businesses primarily in the technology / tech-enabled and creative sectors. The Fund Managers will be expected to invest in Nigerian businesses at their early to growth stages. The Fund shall be deployed as three separate fund entities as follows: –
- A Technology Sector Fund;
- A Creative Sector Fund;
- A Fund of Funds that will cover indirect investments in both the technology and creative sectors
The expected investment period is four years with follow-on investments thereafter. The life of the funds will be 10 years (extendable 2 years) for both the Technology Sector Fund and the Creative Sector Fund while it will be 15 years for the Fund of Funds.
The Fund Manager(s)’s assignment will include but not be limited to:
- Design and set-up of the fund including legal, operational, financial, exit and reporting structure.
- Establishment of the investment strategy (including prospective nationwide geographic coverage) for funds through the deal pipeline.
- Deal sourcing and identification of an eligible and realistic pipeline.
- Deployment of robust due diligence procedures.
- Deal structuring and negotiations.
- Preparation of the fund’s financial, governance, operational policies, performance management strategy, and communication plan as well as other relevant documentation for fund operation.
- Fundraising (including the preparation of private placement memorandum, pitch books and other marketing materials).
- Investor management activities including the management of committed capital.
- Defining and implementing a value-addition strategy for portfolio investments.
- Investment compliance monitoring.
- Development and implementation of a technical assistance framework to complement the equity fund.
- Exit implementation.
- Reporting and other administrative services.
Each fund management company will operate under the guidance of its Advisory Board comprising Limited Partners of the Fund.
The Bank of Industry now invites eligible Firms to indicate their interest in providing services in one or more of the three separate fund entities. Allocation will be determined following a review of applications and based on best fit. Interested firms must clearly state the Fund entity or entities of interest. They must also provide the following information indicating that they are qualified to perform the services:
- Must have at least five (5) years of cognate and documented track record as a Fund Manager of venture capital / private equity funds or comparable institutional investment experience in the technology/creativity sector or any other fast-growing relevant investment sector in Nigeria.
- Must have evidence of sector-related or other relevant fast-growing sector investments in its portfolio in the last 5 years.
- A verifiable pipeline of potential investee companies across Nigeria.
- Demonstrable value-addition capabilities concerning portfolio investments.
- Must demonstrate a track record of:
- Equity/quasi-equity Venture Capital (VC) fund structuring and setup in the last 5 years.Capital raising and equity fund management specific to the technology/creativity sector (sector of choice) in the last 5 years.Proof of existing network with VC traditional investors in the technology/creativity sector (sector of choice) or other relevant fast-growing sectors.
- Managing large VC funds including the financial return and development impact achieved in the technology and/or creativity sector in the last 5 years.
- Experience in the Nigeria / Sub-saharan VC and creative Industry or other relevant fast-growing sectors, including partnerships with start-ups, and active Enterprise Support Organizations.
- Evidence of a strong operational fund management team with an understanding of the Nigerian technology/creative sector investment segment or other fast-growing sectors, including experienced investment staff and robust middle- and back-offices.
- Must be willing to invest at least 2% of Total Capitalization towards the Total Capital Pool required for investment in the assigned Fund.
- Must possess existing relationships and network with relevant local and international industry players.
- An understanding of the ecosystem (tech and/or creative sector) elements that must be in place to support the growth of equity investments in Nigeria will be an added advantage.
- Must possess a clear geographic understanding of the various states and the funding landscape in those states.
- Ability to effectively profile the opportunity sphere across all 36 states and the FCT. The Fund Manager should be available to coordinate and direct requests for funding from interested businesses throughout the country.
Legal & Compliance Requirements
The following requirements are applicable to companies/firms that are submitting EOI either as a single firm or a consortium of firms from Nigeria. For a consortium of firms or Single firms domiciled in Nigeria, the lead member MUST provide the following documents:
- Evidence of legal registration with the Corporate Affairs Commission (CAC).
- Submission of Memorandum and Articles form CAC07 (i.e. Particulars of Board of Directors) and Form CAC02 (i.e. Particulars of Shareholders).
- Evidence of relevant operating license(s).
- Evidence of Registration with BPP National Database of Contractors, Consultants and service providers.
- Clearance Certificate from National Pension Commission as evidence of compliance with the Pensions Reform Act, 2004.
- Compliance Certificate from the Industrial Training Fund (ITF) as evidence of compliance with the Industrial Training Fund Amendment Act, 2011.
- Sworn affidavit indicating that all documents submitted are genuine and verifiable.
- Confirmation of financial capacity of the company (3 years audited statement of accounts and financial summary).
- Evidence of Company Tax Clearance Certificates for the last 3 years.
- VAT Registration.
Firms that are registered outside Nigeria shall submit relevant legal and compliance documents as applicable to their countries of jurisdiction.
- Detailed company profile indicating management team, ownership structure, competence of firm, office and branch contact details (where applicable).
- Evidence of availability of appropriate skills among staff to be proposed for the assignment.
- Brief summary of successfully exited investments in the last 3 years with key information on the company, exit strategy adopted, fund/investment size, and IRR of the fund.
- List of existing investments with the following information (emphasis on investments in the Technology and/or Creative sectors and in Nigeria/sub-Saharan Africa):
- Sector focus
- Brief description of the investee company including growth stage and performance.
- Type of investment
- Target IRR
- Fund term
- Current status of the investee company.
- Submission must clearly state the Fund that your firm is interested in managing with clear justification.
- Any other information that may strengthen the application.
Firms may constitute joint ventures to enhance their chances of qualification. In this case, the arrangement must be clearly indicated in the submission vide an organogram stating the members of the consortium.
Greenfield funds may apply provided the promoters demonstrate a deep experience in fund management, investment execution, multilateral development and a detailed understanding of the Nigerian environment.
Eligibility criteria, establishment of the short-list and the selection procedure shall be in accordance with the African Development Bank’s Procurement Policy for Bank Group Funded Operations (October 2015), which is available on the Bank’s website at http://www.afdb.org .
Interested firms may obtain further information at the address below during office hours [8 am-5 pm].
Expressions of interest, indicating the Fund Entity of interest, should be delivered in both hard and soft copy to the address below by 18th May, 2023 at 12 noon and mention “EXPRESSION OF INTEREST: FUND MANAGER FOR THE INVESTMENT IN DIGITAL AND CREATIVE ENTERPRISES (iDICE) PROGRAM”.
The iDICE Programme Coordination Unit
Bank of Industry
Tel: 0700 225 5264 (0700 CALL BOI)