Strategic Finance

Transaction Advisory Services

Capability Statement

 

Transforming Wealth into Impact

We offer a comprehensive range of transaction services for impact investors, including target identification, valuation, due diligence, deal structuring and M&A. We support institutions in raising growth funds. In the last 10 years, LFS has built up an in-depth expertise in the field of transaction services, fund management and capital markets advisory. The knowledge gained, tools developed, and contacts built during this period, enable us to provide a comprehensive array of services to impact investors, project incubators as well as companies looking for catalytic growth capital.

 

Range of Services

 

Transaction Services
Due Diligence/Diagnostics

Examining target companies thoroughly before or after the investment decision with the help of gap analysis.
Valuation

Performing realistic valuation models based on target company and market data.
Stress Testing Investee Financials/Forecasts

Testing the resilience of target firm numbers through stress testing and sensitivity analysis.
Deal Structuring, Execution and Negotiation

Optimized equity and debt structures depending on investor’s risk/return profile to enhance value-add.

Portfolio & Fund Management
Credit Line Management, Design and Review

Helping impact investors to select and fund local partner financial institutions.
Set-up and Management of Investment Vehicles

Designing and operating new investment vehicles for the impact finance industry.
Development of Portfolio and Fund Management Tools

Delivering complete toolkits for managing and de-risking impact investment vehicles.
Entry and Exit Strategies/Counterparty Identification

Strategic advisory and direct support to matching capital market participants.
 

Capital Market Advisory for Business
Capital Market and Fundraising Strategies

Supporting the planning and realization of strategies to raise new growth capital.
Structured Private Placements

Optimizing investment terms through structured and competitive processes.
Investor Profile Mapping and Identification

Systematic definition of required investor profiles and identification of partners.
Vendor/Issuer Due Diligence and Data room Support

Facilitating the investor due diligence through proactive information management.

Additional Services
Treasury, Hedging and Deal Execution Support

Development and execution of strategies and solutions for placement of liquid funds or tailored foreign exchange risk mitigation.
Board Mandates

Protecting investments and helping to achieve goals through active & diligent board representation.
Environmental & Social Reviews and Policies

Evaluating E&S aspects of contemplated investments and designing solutions to mitigate identified risks.
Impact & Social Returns

Help double/triple bottom line investors to measure impact and benchmark social returns of their investments.

 

Project Spotlights

 

Fund Structuring & Launch of “The Social Enterprise Fund for Agriculture in Africa” (SEFAA Fund)

KfW (Germany) and The Small Foundation (Ireland), 2020 - ongoing

LFS has been mandated by the German Development Bank, KfW and by The Small Foundation (Ireland) as co-investors, to set up a new, open-ended investment vehicle, focused on supporting social agricultural enterprises in Sub-Saharan Africa.

Key project work includes:

  1. Fund structuring, i.e. identifying the optimal investment vehicle for the purpose of financing social agricultural enterprises in Africa, and within the operational constraints of the co-investors.
  2. Supporting and reviewing the investment landscape for various countries of Sub-Saharan Africa (i.e. research on available funding options, and on the demand-supply gap).
  3. Research Monitoring and Evaluation (M&E) concepts using lean data technologies.
  4. Launching the Luxembourg RAIF Fund, including selecting all service providers (Fund Manager, Depositary Bank, Fund Administrator, External Auditors), and overseeing the capitalisation and registration of the vehicle with the competent (Luxembourg) authorities.
  5. Identifying and executing the optimal cash management solutions, to place the Fund liquidity during the pre-operational phase.
  6. Since the launch of the Fund in December ‘20, serving on its Board of Directors.
Financial Modeling & Tender Agency of the Foundation “Clean Energy & Energy Inclusion Africa” (CEI Africa)

KfW (Germany), 2020 - ongoing

LFS has been mandated by KfW to advise on financial structuring and to support the selection of the Manager of a new Dutch Foundation, that will provide (a) direct debt financing – in partnership with leading crowdlending operators – for Mini-Grids and Small Off-Grid-Renewable Energy enterprises in Sub-Saharan Africa, and (b) Results-Based Financing (RBF) to incentivize entrepreneurs to develop, expand and operate Mini-Grids in Sub-Sahara Africa (“Smart Outcomes Fund”).

Key project work includes:

  1. Developing a financial model that compares the cost-effectiveness of alternative investment vehicles and scenarios (e.g. Dutch Foundation, Luxembourg Fund, German Foundation, etc) for setting-up CEI Africa.
  2. Carrying out the pre-qualification process and the short-listing of bidders.
  3. Creation of all tender documents: invitation letter, bid and contract conditions, design of detailed terms of reference and bidder specifications.
  4. Creation of the evaluation schemes, and carrying out the evaluation (including bidder interviews) according to the tender conditions, including an articulated award proposal.
  5. Support in contract negotiations, conclusion of the contract, communication with the bidders.
  6. Documentation of the entire award process.
  7. Identifying and executing the optimal Cash Management solutions, to place the Fund liquidity during the pre-operational phase.

 

Interim Manager of the “Investing for Employment” (IFE) Grant Facility / Design & Implementation of IFE Corona Response Programme

KfW (Germany), 2020 - ongoing

LFS was selected to launch and manage ad interim the “Investing for Employment” facility, founded by KfW to provide co-financing grants for new investment projects in Sub-Saharan Africa with a high job creation impact.

Main tasks under the project include:

  1. Foundation and interim management of the facility.
  2. Creation of policies, procedures and tools for the management of the facility.
  3. Selection and implementation/configuration of an online grant management solution.
  4. Design and conduct pilot Call for Proposals in Ethiopia, including definition of evaluation criteria for projects and comprehensive review of project proposals from applicant companies and organizations in various sectors.
  5. After handover to the long-term manager, supporting the evaluation of project proposals in follow-up calls for proposals in Tunisia and Côte d’Ivoire.
  6. Design of a pilot for a second-round Call for Proposals in Ethiopia with focus on digitization, technology entrepreneurship and digital skills.

Additionally, LFS was mandated to design and implement a Corona-response programme for IFE, in order to preserve employment by SMEs in partner countries in collaboration with local financial institutions across Africa, for a total volume of EUR 65 million. Main tasks under this component include:

  1. Design of eligibility criteria and support instruments (interest subsidy, credit relief).
  2. Screening and due diligence of partner financial institutions.
  3. In-depth analysis of credit portfolio data of the partner banks, to examine the effects of the Covid-19 restrictions on borrowers.
  4. Development of standard operating procedures (SOPs) and administration of the programme in conformity with the SOPs.
  5. Design and implementation of an electronic data room and process management solution for the compilation and tracking of data of beneficiaries under the programme.
Transaction Advisory Services for Capital Mobilization in Malawi

Investment Support Facility (ISF), 2019 - ongoing

In 2019, LFS embarked on a three-year project in Malawi, aiming to unlock capital for economic diversification in the country under the Agricultural Transformation Initiative. The Investment Support Facility (ISF) will facilitate the packaging and closing of a diversity of debt, equity and blended finance transactions while simultaneously supporting the development of inclusive, gender-equitable business models, that integrate smallholder farmers and small enterprises.

The project mainly focuses on supporting agricultural enterprises in the non-tobacco value chains that have high impact potential to mobilize capital from local or international investors. LFS performs a large range of activities including:

  1. Analysis of market landscape for agricultural financing in Malawi and the Southeast Africa region.
  2. Participation in training workshops and investor events.
  3. Identifying and evaluating agricultural enterprises with a view to their capital raising potential and impact generating capacity.
  4. Identifying and contacting suitable investors for the agricultural enterprises.
  5. Organization of virtual and physical roadshows, deal rooms or other investor events.
  6. Process management and deal structuring.
  7. Financial analysis, stress-testing and modelling

 

Project References

The table below contains a summary overview of relevant projects carried out by LFS over the last years in the business line of strategic finance / transaction advisory services. More detailed information on selected projects can be provided on request.

 
Country
Client
Year
Project & Description
 
Africa

FMO / Africinvest Private Credit

2020 - ongoing

FX risk mitigation and local currency support for an SME-focused investment fund.

Africa

Investment facility owned by KfW

2020 - ongoing

Management of a EUR 65 million Covid-19 response project involving financial institutions in various African countries.

Malawi

Investment Support Facility (ISF)

2019 - ongoing

Support of agricultural enterprises in non-tobacco value chains with high impact potential to mobilize capital from local and international investors.

Ethiopia

UNDP / Federal Government of Ethiopia

2020 - 2021

Structuring and capital mobilization support for a new venture capital fund focused on the technology sector.

Malawi

Non-bank financial institution

2020 - 2021

Strategic advisory and capital mobilization support for a new non-bank Development Finance Institution.

Nigeria

KfW / Babban Gona

2021

Equity valuation of a Nigerian Agri/Fintech, within a EUR 11m equity investment from KfW.

Africa

KfW

2021

Financial modelling and tender management for a new investment vehicle focused on the Clean Energy sector in Sub-Saharan Africa.

India

Microfinance institution

2020

Capital-raising support for innovative digital MFI in India.

Africa

KfW

2019 - 2021

Financial modelling and tender management for a new investment vehicle focused on the Clean Energy sector in Sub-Saharan Africa.

Africa

KfW

2019 - 2020

Foundation advisor and interim manager of a new investment facility to co-finance job creation projects in Africa.

Global

KfW

2019 - 2020

Stocktaking of International Financial Cooperation & Toolbox of Innovative Development Finance.

Egypt

Al-Ahly Capital Holding

2019 - 2020

Strategic investment analysis regarding the launch of a commercially-driven microfinance company.

Pakistan

Karandaaz

2019 - 2020

Market analysis, product portfolio creation, financial strategy and operationalization support for the creation of a SME focused non-bank financial company.

India

Resham Sutra

2019

Due diligence and investment and transaction advisory services for a renewable energies company.