KEY POINTS

• CardinalStone West Africa SME fund targets $120 million.
• IFC may anchor the fund with $15 million.
• Focus remains on profitable, scalable businesses.

CardinalStone Capital Advisers is preparing to raise a $120 million private equity fund targeting small and medium-sized businesses across West Africa, as investors seek growth opportunities beyond technology startups and listed equities.

The Lagos-based firm says the new vehicle, Growth Fund II, will focus on established companies that have moved beyond survival but still face limits in accessing long-term capital. The fund will concentrate on Nigeria and Ghana while expanding into francophone markets including Côte d’Ivoire and Senegal, regions that have drawn less private equity attention despite steady demand.

The strategy reflects a view inside CardinalStone that the region’s next phase of growth will be driven by businesses that already generate profits but lack the funding and structure needed to scale.

The fundraising effort is led by Yomi Jemibewon, a managing director and co-founder of CardinalStone’s private equity unit. Jemibewon, a former investment banker, has spent years building a reputation around structured deals and close involvement with portfolio companies.

Backing businesses beyond startups

Growth Fund II will take minority stakes using equity and equity-linked investments. CardinalStone plans to combine capital with hands-on support in strategy, finance and management, rather than passive ownership.

The fund is designed as a generalist vehicle, with investments spread across consumer goods and services, agribusiness, select industrial businesses and parts of financial services. These sectors, the firm says, reflect everyday demand and more resilient supply chains in West Africa’s volatile economic environment.

CardinalStone is also in talks with development finance institutions. The International Finance Corporation, part of the World Bank Group, is considering an investment of up to $15 million. Such backing would provide early validation and could attract other institutional investors looking for exposure to mid-market companies rather than early-stage ventures.

A bet on regional scale

According to Billionaire Africa, the fund will likely be domiciled in Mauritius, a structure widely used for regional private equity vehicles because it simplifies cross-border administration. CardinalStone says it plans to push stronger governance standards, improved reporting and more professional management across its portfolio.

Those changes often help businesses attract follow-on funding and reduce reliance on founders, a common weakness among privately owned firms in the region.

Growth Fund II follows CardinalStone’s first private equity fund, which closed in 2021 at $64 million. That vehicle targeted similar businesses, with typical investments ranging between $5 million and $10 million.

Lessons from the debut fund have shaped the new raise. The firm says disciplined entry pricing, operational improvements and a clear expansion plan proved critical to value creation.