EFA Group launches credit fund for Asia and Eastern Europe

Private debt specialist manager EFA Group has launched a Financial Institutions Debt Fund to provide credit to banks and financial institutions in developing areas of Asia and Eastern Europe.

The new fund aims to raise $100 million for short- and medium-term financing to financial institutions in markets with strong GDP growth, shallow local capital markets and limited access to international markets. EFA Group said that the fund aims to produce superior risk-adjusted returns, of 10-12% a year with leverage, thanks to low default rates at the targeted institutions and their attractively priced debt. EFA’s Kashama Pascal Nyangombe, who will manage the fund, explained: “If you are a well-run bank or solid financial institution operating in a country with a low credit rating your ability to grow by raising money internationally will be tainted by the sovereign credit rating. This taint is not justified: default rates for such banks and financial institutions are similar to the default rates on institutions enjoying lower investment grade ratings elsewhere in the world.”

Kashama has over 18 years of experience in financial service, including emerging and frontier markets. He was previously a director at UBS and headed corporate and SME banking units at leading African banks.