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private equity industry south africa

The Private Equity Industry in South Africa 2023

Stephen Timm | South Africa | 24 March 2023

The Private Equity Industry in South Africa 2020

Carole Veitch | South Africa | 27 March 2020

The Private Equity Industry in South Africa 2018

Louise Mitchell | South Africa | 07 November 2018

The Private Equity Industry in South Africa 2016

Ebrahim-Khalil Hassen | South Africa | 09 March 2016

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Report Coverage

This report covers the private equity sector in South Africa including venture capital and SME funding. It includes information on the size and state of the sector, investment and corporate activity, funds under management, funds raised and returns, notable players and developments, including regulatory developments which could result in new investment trends. There are profiles of 28 companies including RMB Corvest and RMB Ventures, Metier, African Rainbow Capital, Hlayisani Capital, Vantage Capital and the SA SME Fund.

The Private Equity Sector in South Africa

While funds under management have increased, the private equity sector has experienced a slowdown in the value and number of investments since 2018. Returns have also been falling recently. The slowing global and local economy is likely to mean a tougher 2023 for fund managers. South Africa’s grey listing and ratings downgrades are other challenges. However, Pension Funds Act amendments, which came into effect in January 2023, could help increase investment in venture capital and in infrastructure.

Venture Capital

In recent years there has been an increase in venture capital investments in startups. Fintech accounts for most venture capital investments and exits by value and number. There has also been an increase in the number of institutional investors backing venture capital. Increasingly South African venture capital funds are investing in startups on the rest of the continent. Most venture capital investments are at early stage and there is a lack of follow-on funding.

Regulation

Amendments to Regulation 28 of the Pension Funds Act, which came into effect in January 2023, allow pension funds to allocate up to 45% investment in South African infrastructure projects, up from 30% previously. They also increase the amount of assets pension funds can allocate to private equity to 15% (from 10% previously).

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The Private Equity Industry in South Africa 2023

Full Report

R 20 000.00(ZAR) estimated $1068.03 (USD)*

Industry Overview

R 14 000.00(ZAR) estimated $ 747.62 (USD)*

Historical Reports

The Private Equity Industry in South Africa 2020-03-27

R 1 900.00(ZAR) estimated $101.46 (USD)*

View Report Add to Cart

The Private Equity Industry in South Africa 2018-11-07

R 1 900.00(ZAR) estimated $101.46 (USD)*

View Report Add to Cart

The Private Equity Industry in South Africa 2016-03-09

R 1 900.00(ZAR) estimated $101.46 (USD)*

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Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 4
2.2. Geographic Position 5
2.3. Size of the Industry 6
3. LOCAL 10
3.1. State of the Industry 10
3.2. Key Trends 16
3.3. Key Issues 21
3.4. Notable Players 21
3.5. Corporate Actions 22
3.6. Regulations 27
3.7. Enterprise Development and Social Development 31
4. AFRICA 33
5. INTERNATIONAL 37
6. INFLUENCING FACTORS 40
6.1. Economic Environment 40
6.2. Labour 41
6.3. Technology, R&D, Innovation 42
6.4. Government Involvement 43
6.5. Pension Fund Investment 44
6.6. Infrastructure Investment 45
6.7. Environmental Issues, ESG and Responsible Investing 46
6.8. Cybersecurity 48
7. COMPETITIVE ENVIRONMENT 48
7.1. Competition 48
7.2. Ownership Structure of the Industry 49
7.3. Barriers to Entry 51
8. SWOT ANALYSIS 51
9. OUTLOOK 52
10. INDUSTRY ASSOCIATIONS 53
11. REFERENCES 53
11.1. Publications 53
11.2. Websites 54
APPENDIX 1 56
Summary of Notable Players 56
COMPANY PROFILES 61
4Di Group (Pty) Ltd 61
Acorn Private Equity (Pty) Ltd 63
African Rainbow Capital Investments Ltd 65
Altvest Capital Ltd 68
AYO Technology Solutions Ltd 70
Bopa Moruo Private Equity Fund Managers (Pty) Ltd 73
Convergence Partners Management (Pty) Ltd 75
Edge Growth Business Development (Pty) Ltd 78
Grovest Venture Capital Company (Pty) Ltd 80
Havaic Holdings South Africa (Pty) Ltd 82
Hlayisani Fund Managers (Pty) Ltd 84
Horizon Equity Partners (Pty) Ltd 85
IDF Capital (Pty) Ltd 87
Jozi Angels Investment Group (Pty) Ltd 89
K2018565981 (South Africa) (Pty) Ltd 90
Launch Africa Ventures Fund 1 91
Metier Investment and Advisory Services (Pty) Ltd 93
Naspers Ltd 96
NESA Venture Capital Investments (Pty) Ltd 100
Pallidus Holdings (Pty) Ltd 102
Pembani Remgro Infrastructure Managers (Pty) Ltd 104
Phatisa Managers (Pty) Ltd 106
RMB Corvest (Pty) Ltd 109
RMB Ventures (Pty) Ltd 111
SA SME Fund Ltd (The) 113
Vantage Capital Group (Pty) Ltd 115
Vuna Partners (Pty) Ltd 117
Vunani Capital Partners Ltd 119

Report Coverage

This report focuses on the South African Private Equity Industry and includes comprehensive information on the state and size of the industry, influencing factors, corporate actions and issues affecting SME funding. There are profiles of 45 companies including private equity players such as Ethos, Actis, African Rainbow Capital, Brait and Metier. Other profiles include government-owned Industrial Development Corporation and the National Empowerment Fund, industry participants in the SME space such as AngelHub Ventures and Newtown Partners, and Section 12J companies such as Westbrooke and Grovest.

The South African Private Equity Industry (Including SME Funding)

Southern African private equity funds under management grew at a compound annual rate of over 9% over the past two decades. Private equity investments generate financial returns for investors and play a role in stimulating the economy and job creation. Although private equity continues to attract investors seeking access and exposure to unlisted companies with high growth prospects, the asset class remains under-utilised.

Limited Allocation

While investment opportunities are plentiful in South Africa, the fundraising environment remains extremely challenging, particularly for early stage funds. Role players say that in addition to the unfavourable economic environment, many prospective investors still have a relatively limited understanding of the value of private equity and venture capital. Local pension fund allocations to private equity funds are around 5%, well below the 10% threshold.

SME Funding

Section 12J legislation aimed at stimulating private investment in startups and SMEs by providing tax relief has seen a marked increase in approved 12J venture capital investments. The legislation, which contains a sunset clause ending tax deductions in 2021, is under review. The industry is lobbying Treasury for an extension as these investments have incentivised investment into SME development, which stimulates the domestic economy and helps to create jobs.

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The Private Equity Industry in South Africa 2020

Full Report

R 1 900.00(ZAR) estimated $101.46 (USD)*

Industry Overview

R 1 330.00(ZAR) estimated $ 71.02 (USD)*

Historical Reports

The Private Equity Industry in South Africa 2023-03-24

R 20 000.00(ZAR) estimated $1068.03 (USD)*

View Report Add to Cart

The Private Equity Industry in South Africa 2018-11-07

R 1 900.00(ZAR) estimated $101.46 (USD)*

View Report Add to Cart

The Private Equity Industry in South Africa 2016-03-09

R 1 900.00(ZAR) estimated $101.46 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 4
2.2. Geographic Position 5
3. SIZE OF THE INDUSTRY 6
4. STATE OF THE INDUSTRY 9
4.1. Local 9
4.1.1. Corporate Actions 11
4.1.2. Regulations 13
4.1.3. Enterprise Development and Social Economic Development 16
4.2. Continental 20
4.3. International 23
5. INFLUENCING FACTORS 26
5.1. Economic Environment 26
5.2. Pension Fund Investment 26
5.3. Infrastructure Investment 27
5.4. Responsible Investing 27
5.5. Impact Investing 28
5.6. Labour 29
5.7. Technology, Research and Development (R&D) and Innovation 30
5.8. Cybersecurity 30
6. COMPETITION 31
6.1. Barriers to Entry 31
7. SWOT ANALYSIS 32
8. OUTLOOK 33
9. INDUSTRY ASSOCIATIONS 33
10. REFERENCES 34
10.1. Publications 34
10.2. Websites 34
APPENDIX 1 36
Private Equity Deals in 2019 36
APPENDIX 2 39
Summary of Notable Players 39
COMPANY PROFILES 50
ACORN PRIVATE EQUITY (PTY) LTD 50
ACTIS AFRICA LTD 52
AFRICAN RAINBOW CAPITAL INVESTMENTS LTD 54
AGILE CAPITAL (PTY) LTD 57
ANGELHUB (PTY) LTD 59
BOXCARS DOZEN (PTY) LTD 60
BRAIT SE 62
BUSINESS PARTNERS LTD 64
CAPITALWORKS INVESTMENT PARTNERS (PTY) LTD 69
DEVELOPMENT BANK OF SOUTHERN AFRICA 71
DEVELOPMENT PARTNERS INTERNATIONAL LLP 74
EDGE GROWTH BUSINESS DEVELOPMENT (PTY) LTD 76
EPE CAPITAL PARTNERS LTD 78
ETHOS PRIVATE EQUITY (PTY) LTD 81
EXEO CAPITAL (SA) (PTY) LTD 84
GROVEST VENTURE CAPITAL COMPANY (PTY) LTD 86
HARITH GENERAL PARTNERS (PTY) LTD 88
HORIZON EQUITY PARTNERS (PTY) LTD 91
HULISANI LTD 92
INDUSTRIAL DEVELOPMENT CORPORATION OF SOUTH AFRICA LTD 95
INTEL SOUTH AFRICA CORPORATION 106
INTERNATIONAL FINANCE CORPORATION 108
KALON VENTURE PARTNERS LTD 111
KNIFE CAPITAL (PTY) LTD 113
KZN GROWTH FUND TRUST 115
LEBASHE INVESTMENT GROUP (PTY) LTD 118
LEREKO INVESTMENTS (PTY) LTD 120
LUCID VENTURES (PTY) LTD 123
MINEWORKERS INVESTMENT COMPANY (RF) (PTY) LTD 124
NATIONAL EMPOWERMENT FUND TRUST 127
NEDBANK LTD 132
NESA VENTURE CAPITAL INVESTMENTS (PTY) LTD 141
NEWTOWN PARTNERS (PTY) LTD 143
NOVARE EQUITY PARTNERS (PTY) LTD 145
OLD MUTUAL PRIVATE EQUITY (DIVISION OF OLD MUTUAL INVESTMENT GROUP (PTY) LTD) 147
PALLIDUS HOLDINGS (PTY) LTD 149
PEMBANI REMGRO INFRASTRUCTURE MANAGERS (PTY) LTD 151
PUBLIC INVESTMENT CORPORATION SOC LTD 153
REMGRO LTD 161
RH BOPHELO LTD 166
RMB PRIVATE EQUITY (PTY) LTD 168
ROCKWOOD PRIVATE EQUITY (PTY) LTD 170
SANLAM PRIVATE EQUITY (DIVISION OF SANLAM INVESTMENT MANAGEMENT (PTY) LTD) 172
SASFIN CAPITAL (PTY) LTD 174
WESTBROOKE ALTERNATIVE ASSET MANAGEMENT (PTY) LTD 176

Report Coverage

The Private Equity report describes important changes and key developments, current conditions, recent merger and acquisition activity and factors influencing the success of the industry. The report profiles 25 public and private companies including the Public Investment Corporation, Ethos, Brait, African Rainbow Capital, Lereko and the private equity arms of major fund managers including Old Mutual and Sanlam.

Private Equity

Private equity’s capital penetration, or capital injected into the economy through private investments, was equal to 0.7% of GDP in 2017, and the sector is an important role player in the development of companies and infrastructure projects in the country. South Africa’s private equity industry had R158bn in funds under management in 2017. The volume and value of private equity and venture capital deals targeting South African companies declined year-on-year in 2017 with 43 deals worth a combined US$312m, compared to the US$896m invested across 60 deals in 2016. In terms of value, 2017’s results were the lowest since 2010. Private equity continues to outperform listed equity.

Influencing Factors

The relatively expensive level of equities on the Johannesburg Stock Exchange, regulatory acceptance of investment by South African pension funds in private equity funds, government’s renewable energy programme, the need for banks to reduce their loan books, infrastructure requirements and the economic growth enjoyed by some sub-Saharan African countries are fuelling renewed interest in private equity investment. While the recent focus has been on deploying rather than raising funds, the decline in fundraising is a concern to industry role players.

Read More..
The Private Equity Industry in South Africa 2018

Full Report

R 1 900.00(ZAR) estimated $101.46 (USD)*

Industry Overview

R 1 330.00(ZAR) estimated $ 71.02 (USD)*

Historical Reports

The Private Equity Industry in South Africa 2023-03-24

R 20 000.00(ZAR) estimated $1068.03 (USD)*

View Report Add to Cart

The Private Equity Industry in South Africa 2020-03-27

R 1 900.00(ZAR) estimated $101.46 (USD)*

View Report Add to Cart

The Private Equity Industry in South Africa 2016-03-09

R 1 900.00(ZAR) estimated $101.46 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF INDUSTRY 1
2.1. Industry Body 4
2.2. Industry value chain 4
2.3. Geographic Position 6
3. SIZE OF THE INDUSTRY 6
4. STATE OF THE INDUSTRY 8
4.1. Local 8
4.1.1. Corporate Actions 11
4.1.2. Regulations 14
4.1.3. Enterprise Development and Social Economic Development 18
4.2. Continental 22
4.3. International 24
5. INFLUENCING FACTORS 26
5.1. Economic environment 26
5.2. Pension Fund Investment 27
5.3. Infrastructure Investment 28
5.4. Responsible Investing 29
5.5. Impact Investing 30
5.6. Labour 31
5.7. Information Technology (IT), Research and Development and Innovation 32
5.8. Cybersecurity 33
6. COMPETITION 33
7. SWOT ANALYSIS 34
8. OUTLOOK 35
9. INDUSTRY ASSOCIATIONS 35
10. REFERENCES 36
10.1. Publications 36
10.2. Websites 37
APPENDIX 1 38
Summary of Major Players 38
COMPANY PROFILES 46
ACTIS AFRICA LTD 46
AFRICAN RAINBOW CAPITAL INVESTMENTS LTD 48
BRAIT SE 51
BUSINESS PARTNERS LTD 54
CAPITALWORKS INVESTMENT PARTNERS (PTY) LTD 59
DEVELOPMENT BANK OF SOUTHERN AFRICA 61
DEVELOPMENT PARTNERS INTERNATIONAL LLP 64
EPE CAPITAL PARTNERS LTD 66
ETHOS PRIVATE EQUITY (PTY) LTD 69
HULISANI LTD 72
INDUSTRIAL DEVELOPMENT CORPORATION OF SOUTH AFRICA LTD 75
INTEL SOUTH AFRICA CORPORATION 86
INTERNATIONAL FINANCE CORPORATION 88
KZN GROWTH FUND TRUST 91
LEREKO INVESTMENTS (PTY) LTD 94
MINEWORKERS INVESTMENT COMPANY (RF) (PTY) LTD 97
NATIONAL EMPOWERMENT FUND TRUST 100
NEDBANK LTD 105
OLD MUTUAL PRIVATE EQUITY (DIVISION OF OLD MUTUAL INVESTMENT GROUP (PTY) LTD) 114
PEMBANI REMGRO INFRASTRUCTURE MANAGERS (PTY) LTD 117
PUBLIC INVESTMENT CORPORATION SOC LTD 119
REMGRO LTD 126
RMB PRIVATE EQUITY (PTY) LTD 131
ROCKWOOD PRIVATE EQUITY (PTY) LTD 133
SANLAM PRIVATE EQUITY (DIVISION OF SANLAM INVESTMENT MANAGEMENT (PTY) LTD) 135

Report Coverage

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.

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.

Government Support

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.

Read More..
The Private Equity Industry in South Africa 2016

Full Report

R 1 900.00(ZAR) estimated $101.46 (USD)*

Industry Overview

R 1 330.00(ZAR) estimated $ 71.02 (USD)*

Historical Reports

The Private Equity Industry in South Africa 2023-03-24

R 20 000.00(ZAR) estimated $1068.03 (USD)*

View Report Add to Cart

The Private Equity Industry in South Africa 2020-03-27

R 1 900.00(ZAR) estimated $101.46 (USD)*

View Report Add to Cart

The Private Equity Industry in South Africa 2018-11-07

R 1 900.00(ZAR) estimated $101.46 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF INDUSTRY 1
2.1. Industry value chain 3
2.2. Geographic Position 5
3. SIZE OF INDUSTRY 5
4. STATE OF THE INDUSTRY 15
4.1. Local 15
4.1.1. Corporate Actions 16
4.1.2. Regulations 20
4.1.3. Enterprise Development and Social Economic Development 25
4.2. Continental 26
4.3. International 29
5. INFLUENCING FACTORS 30
5.1. Economic environment 30
5.2. Labour Resources 32
5.3. Technology, Research and Development (R&D) and Innovation 33
5.4. Environmental Concerns 33
6. COMPETITION 34
6.1. Competition Commission Rulings 34
7. SWOT ANALYSIS 35
8. OUTLOOK 36
9. INDUSTRY ASSOCIATIONS 36
10. REFERENCES 36
10.1. Publications 36
10.2. Websites 37
COMPANY PROFILES 38
Actis Africa Ltd 38
Brait SE 40
Business Partners Ltd 42
CapitalWorks Investment Partners (Pty) Ltd 46
Development Bank of Southern Africa 48
Development Partners International LLC 52
Ethos Private Equity (Pty) Ltd 54
Industrial Development Corporation of South Africa Ltd 56
Intel South Africa Corporation 63
International Finance Corporation 65
KZN Growth Fund Trust 68
Lereko Investments (Pty) Ltd 71
M FITEC International Ltd 74
Mineworkers Investment Company (RF) (Pty) Ltd 76
National Empowerment Fund Trust 79
Nedbank Ltd 84
Old Mutual Private Equity (Division of Old Mutual Investment Group (South Africa) (Pty) Ltd) 92
Public Investment Corporation SOC Ltd 95
Remgro Ltd 101
RMB Private Equity (Pty) Ltd 106
Rockwood Private Equity (Pty) Ltd 108
Sanlam Investment Management (Pty) Ltd 111