ARM Investment Managers has announced the launch of Series I of the ARM Private Debt Fund, a N200 billion private credit fund to provide structured, long-term financing to scalable small and medium-sized enterprises (SMEs).

The fund is structured as a closed-ended private credit vehicle and will deploy capital primarily through senior secured term loans, revolving credit facilities and selective subordinated debt to high-quality SMEs across key sectors of the Nigerian and sub-Saharan African economy.

The Series I of the programme is targeting an initial raise of N25 billion, with a broader N200 billion shelf programme registered under applicable regulatory frameworks.

The launch comes at a critical time for Nigeria’s economy, as SMEs, despite accounting for nearly half of GDP and over 80 per cent of employment, continue to face significant challenges accessing long-term, non-bank financing.

Regulatory constraints, elevated interest rates and balance-sheet limitations have reduced the capacity of traditional banks to meet the growing credit needs of this segment, creating a structural financing gap that private credit is well positioned to address.

Speaking at the launch of the initiative, Chief Executive Officer, ARM Private Debt Fund, Deji Opeola, said: “Private credit plays a vital role in modern financial systems by providing disciplined, patient capital to businesses that drive real economic activity. This fund has been deliberately structured to combine strong governance, rigorous credit underwriting, and active portfolio management.

“Our objective is to protect investor capital while supporting the growth of viable SMEs that create jobs, deepen local value chains, and contribute meaningfully to economic development.”

Group Chief Executive Officer, ARM Holding, Wale Odutola, said the firm believes that if Nigeria is to grow and grow at the pace and level that we need, to ensure that growth becomes inclusive and permeates all the way down to the lowest level in society, asset classes that are not represented in the organised markets must see substantial investments over the next few years.

He said with this arrangement, providing funding for private sector companies to tap into can help drive growth, expansion, improve the quality of services that they provide, their output and market share.

The ARM Private Debt Fund is targeted at qualified institutional investors, development finance institutions, family offices, and high-net-worth investors seeking exposure to private credit as a portfolio diversifier. The Fund aims to deliver returns of approximately 300bps above the prevailing yield on the Federal Government of 10-year bond, subject to market conditions.

Some of the key features of the Fund include a strong bias toward senior secured lending, with a minimum of 80 per cent of the portfolio invested in asset-backed, covenant-protected facilities. It also has conservative leverage, strict obligor and sector concentration limits, and active monitoring, with independent governance structures, including an Investment Committee and Inyernal Use Advisory Board. The Fund optimises its portfolio diversification across sectors and geographies, with a long-term investment horizon aligned with SME growth cycles.

In addition to investor participation, ARM also invited eligible SMEs and mid-sized businesses seeking structured growth capital to apply for financing under the Fund.

According to the company, the Fund will focus on businesses with proven operating track records and stable or growing cash flows, minimum profitability thresholds of N500m, and strong governance and management structures.

It would also clear use-of-funds for working capital expansion, asset acquisition, or growth initiatives. Priority sectors include manufacturing, trade and distribution, agribusiness value chains (excluding primary agriculture), services, logistics, and technology-enabled businesses, among others.

The ARM Private Debt Fund builds on ARM’s broader alternative investment platform, which includes infrastructure, real estate, trade finance, and sector-focused funds. The Fund is domiciled in Mauritius and structured as a multi-currency vehicle, enabling deployment of both naira and hard-currency capital across Sub-Saharan Africa over time.

By combining global private credit best practices with deep local market expertise, ARM aims to contribute to the development of a more resilient and diversified credit ecosystem, one that supports enterprise growth while maintaining financial discipline.

Opeola said: “This Fund is not a one-off product. It is the foundation of a long-term private credit platform that we believe will play an important role in financing Africa’s next phase of growth.”