The South African Private Equity Sector
This report focuses on the private equity industry in South Africa since 2010. South Africa has a sophisticated and established private equity industry when compared to other emerging and developing countries. The sector had R 162.2bn in funds under management in 2013, which according to the South African Venture Capital and Private Equity Association (SAVCA) and KPMG, represents compound annual growth of 11.8% since 1999. During 2014 the value of funds under management increased to R171.1bn.
Since the 2008 financial crisis that knocked investor confidence, the South African government has introduced regulations to encourage growth in private equity. These include changes to Regulation 28 in 2011 which allows pensions to invest up to 10% of their portfolios in private equity, up from 2.5%, while the Government Employee Pension Fund (GEPF) revised its mandate to allow it to allocate 5% of its portfolio to unlisted investments. National Treasury introduced tax incentives for venture capital firms, and in 2014 offered a further set of incentives. This included increasing the total asset limit for qualifying investee companies from R20m to R50m.
Room for Optimism
Although South Africa will continue to experience low economic growth, the economic environment for private equity in the country is largely positive. One of the reasons is that the sector is supported by effective legal and efficient systems that are deemed amongst the best in the world, according to the World Economic Forum (WEF). The local private equity sector experiences a high level of corporate activity and accounted for 76% of the deal volume (36 deals) and 92% of the deal value in Southern Africa between 2007 and 2014.
The Private Equity report describes important changes and key developments since 2009, current conditions, recent merger and acquisition activity, and factors influencing the success of the industry. The report profiles 22 companies, including major role players, the Public Investment Corporation SOC Ltd (PIC), the Industrial Development Corporation of South Africa Ltd (IDC) and the Development Bank of Southern Africa
t/a DBSA, as well as smaller concerns such as Rockwood Private Equity (Pty) Ltd and Lereko Investments (Pty) Ltd.
||DESCRIPTION OF INDUSTRY
||Industry value chain
||SIZE OF INDUSTRY
||STATE OF THE INDUSTRY
||Enterprise Development and Social Economic Development
||Technology, Research and Development (R&D) and Innovation
||Competition Commission Rulings
||Actis Africa Ltd
||Business Partners Ltd
||CapitalWorks Investment Partners (Pty) Ltd
||Development Bank of Southern Africa
||Development Partners International LLC
||Ethos Private Equity (Pty) Ltd
||Industrial Development Corporation of South Africa Ltd
||Intel South Africa Corporation
||International Finance Corporation
||KZN Growth Fund Trust
||Lereko Investments (Pty) Ltd
||M FITEC International Ltd
||Mineworkers Investment Company (RF) (Pty) Ltd
||National Empowerment Fund Trust
||Old Mutual Private Equity (Division of Old Mutual Investment Group (South Africa) (Pty) Ltd)
||Public Investment Corporation SOC Ltd
||RMB Private Equity (Pty) Ltd
||Rockwood Private Equity (Pty) Ltd
||Sanlam Investment Management (Pty) Ltd