Unlike most mezzanine lenders, AFD Strategic Equity Impact Fund does not require personal or business guarantees from borrowers. Investor capital is protected through a combination of financial insurance guarantees and structured equity participation, offering downside protection without relying on collateral or personal assets.
Investors receive a fixed 8 percent annual interest rate with semi-annual payments. In addition, AFD shares 10 percent of its realized equity buyout fee with investors, creating a secondary return stream. This hybrid model delivers both stable income and long-term upside without equity dilution or ownership risk.
Unlike traditional private equity firms that rely on uncertain exit events, AFD operates with a pre-structured equity repurchase model. Borrowers are expected to repurchase the Fund’s minority equity stake after year four, providing greater visibility into liquidity timing and return realization.
Every borrower is required to engage AFD CFO Services, which delivers monthly financial reviews, covenant monitoring, performance tracking, and strategic advisory. This built-in oversight strengthens borrower discipline and enhances investor protection by ensuring capital is deployed and managed responsibly.
The AFD Strategic Equity Impact Fund invests in high-growth businesses that create jobs, expand access to capital, and drive sustainable local economic development. The Fund takes a diversified, industry-agnostic approach to reduce risk and position investors to benefit from a broad range of strategic lending opportunities.
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