Maia Debt impact fund I
Explore the Maia Debt Impact Fund, designed to generate positive social and environmental impact while delivering strong financial returns.
Fund Overview
Enable investments that positively impact society, promoting gender inclusion
Identified gaps in South Africa’s macroeconomy
Public Debt
As public government debt reaches historically high levels, the need for sustainable financing solutions has never been more critical. This scenario presents a unique opportunity for private capital to step in and address vital areas such as infrastructure development.
With limited public resources available, private investment can play a transformative role by funding essential projects that enhance economic growth and improve societal welfare.
By leveraging private capital, Maia Capital aims to alleviate the burden on public finances whilst driving innovation, efficiency, and resilience in infrastructure spending. Investing in these key areas is not just a financial imperative; it is essential for building a sustainable future.
Public spend on infrastructure
The decline in investment by the government, including SOEs, leaves a gap in the required infrastructure spending.
Social infrastructure is most affected by the decline in infrastructure spending.
Unemployment exacerbated by Covid-19 pandemic
The COVID-19 pandemic has exposed South Africa to a higher number of jobs at risk, adding to the already high and unsustainable levels of unemployment.
The risk is primarily exposing low-income households and affecting households’ disposable income.
Economic Recovery
SA’s economic recovery requires significant private capital investment.
It’s critical that capital investment and economic growth positively impact society to address unemployment and enable inclusive growth.
For a successful GDP recovery, it is imperative that we channel investments in a deliberate and targeted manner, with the aim of enabling inclusive growth.
Opportunity for mezzanine debt
01
Economic recovery for the SA economy relies on private capital investment, given the government’s current low reserves
02
Equity reserves of companies have been eroded by the current economic crisis and the low growth in SA over the past ten years.
There is a need for quasiequity to enable businesses to have healthy capital structures that will allow them to operate and scale up economic activity in the country.
03
Financing options are traditionally dominated by equity (own cash reserves, dilution of shareholding, rights issue/s) and senior debt (primarily from commercial banks).
04
Due to the economy’s volatility and uncertainty, commercial banks have lowered their risk tolerance, limiting available debt overall.
05
Mezzanine debt provides an opportunity to crowd in equity and senior debt and unlocks capital structures for economic investment.
06
Without access to suited finance, this would hinder the private sector’s plans to rebuild the economy.
07
Mezzanine is patient capital that enables companies to pursue opportunities from a long-term strategic approach.
Role of Private Capital
Alternative Funding Source
Quasi-Equity opportunity
Limited Debt Capacity
Unlock of Capital
Economic Recovery
Patient and Flexible Capital
Role of Private Capital
Economic recovery for the SA economy relies on private capital investment, given the government’s current low reserves
Alternative Funding Source
Equity reserves of companies have been eroded by the current economic crisis and the low growth in SA over the past ten years.
There is a need for quasiequity to enable businesses to have healthy capital structures that will allow them to operate and scale up economic activity in the country.
Quasi-Equity opportunity
Financing options are traditionally dominated by equity (own cash reserves, dilution of shareholding, rights issue/s) and senior debt (primarily from commercial banks).
Limited Debt Capacity
Due to the economy’s volatility and uncertainty, commercial banks have lowered their risk tolerance, limiting available debt overall.
Unlock of Capital
Mezzanine debt provides an opportunity to crowd in equity and senior debt and unlocks capital structures for economic investment.
Economic Recovery
Without access to suited finance, this would hinder the private sector’s plans to rebuild the economy.
Patient and Flexible Capital
Mezzanine is patient capital that enables companies to pursue opportunities from a long-term strategic approach.
Investment Guidelines
Strategic Mezzanine Capital Investment Approach
Maia Capital Partners invests in mezzanine capital, which ranks behind senior debt but ahead of equity in a company’s capital structure. This can take the form of hybrid instruments like:
The flexible nature of mezzanine capital allows it to be used for a variety of purposes, including business expansion, acquisition financing, and quasi-equity injections.
Maia has a specific investment criteria, focusing on:
As part of the investment criteria, the investment team will typically target middle to late-stage capital requirements, but may also consider early-stage projects with significant risk mitigation features.
Credit assessment and existing and future cash flows will be more important than asset collateral in making investment decisions. The team seeks to invest alongside other like-minded investors and in structuring transactions.
Maia Capital intends to avoid dramatic turnaround situations and will target established companies with characteristics such as manageable leverage, experienced management, stable demand, and sound financials. Maia Capital will seek to structure investments that can be serviced in a reasonable timeframe from cash flows, with good security in the underlying assets.
>R1bn
Raised for impact investment
Mezzanine Debt
Finance Instrument
R75m - R200m
Transaction size
3-7 years
Tenor
Impact Investing
Maia Capital Partners has developed its impact strategy based on the main national and international protocols for sustainable, impact, and responsible investing, guided by the 2030 Agenda impact matrix, UN Sustainable Development Goals, and market benchmarks related to the implementation, monitoring and management of ESG and impact practices.
View impact Strategy