P+P advises Allianz Global Investors GmbH on launch of German fund of funds "AfricaGrow"

November 2019

Allianz Global Investors GmbH has launched the German fund of funds "AfricaGrow", which was initiated by Kreditanstalt für Wiederaufbau (KfW) on behalf of the Bundesministeriums für wirtschaftliche Zusammenarbeit und Entwicklung (BMZ). P+P Pöllath + Partners advised Allianz Global Investors GmbH as the external AIF capital management company of the fund of funds on all legal and tax matters related to the structuring of the fund of funds.

The fund of funds will provide financial resources for African private equity and venture capital funds (target funds). The goal of the fund of funds is to thereby achieve positive, long-term development policy and have an impact on society as a whole. The fund of funds should contribute to sustainable improvement of the access to equity capital and similar financing (needs-based growth and venture capital) for small and medium-sized companies (SMEs) and startups in progressive African countries and thereby, at the same time, contribute to the creation of sustainable jobs and economic growth. By 2030, this should create over 25,000 new jobs. In conceiving the fund of funds, it was emphasized that the investments will pursue explicit sustainability objectives.
The subscribed capital of the fund of funds should amount to EUR 170 to 200 million up to its last subscription closing. The first investor was KfW on the account of the Federal Republic of Germany with an initial capital commitment of EUR 85 million. DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH, a subsidiary of KfW, pledged another EUR 30 million. Allianz companies will probably undertake additional capital commitments in the amount of EUR 55 to 70 million.

For associated supportive measures, the German government will provide an additional budget of a two-digit million amount (so-called technical assistance facility). Allianz Global Investors GmbH manages the fund of funds as an external AIF capital management company. The project is an important component of the Allianz Group's strategy for Africa.

P+P Pöllath + Partners advised Allianz Global Investors GmbH on all contract law, tax and regulatory aspects of the fund structuring, preparation of fund documentation and negotiations with the investors with the following Frankfurt-based private funds team: