R2.7bn global appetite for SA investments

Aug 01 2013 07:51
Cape Town - A private equity fund that raised over R2.7bn in a record six months has shown that there is a strong international appetite for South African investment opportunities managed by proven local expertise.

The cash investment would stimulate growth in carefully chosen South African businesses, which will boost the country’s economic growth and create employment, said Chad Smart, co-founder and chairperson of Capitalworks.

Erika van der Merwe, CEO of the South African Venture Capital Association and Private Equity Association (Savca), said the fund-raising success by Capitalworks showed appreciation for the strategic role the private equity industry could play in the South African economy.
“With challenges such as uncertain global growth, alongside the imperative to transform the South African economy, the ability of private equity to find real opportunities, to improve efficiencies in businesses and to boost growth, is of huge value to our country,” she said.

According to Smart the Capitalworks Private Equity Fund II managed to attract more than two thirds of its investors from some of the world’s most prestigious custodians of wealth, including global institutional investors, high-net worth family funds and large charities.

“Although the fund was over-subscribed, we had to cap it at the pre-determined level to stay true to our investment strategy.”
London-based Asante Capital Group managing partner, Warren Hibbert said, "it was a pleasure to partner with the Capitalworks team to achieve one of the more efficient fundraisings in Africa to date, having launched the fund in Q1 of this year".

This was achieved off the back of the Capitalworks team's disciplined and consistent approach to the South African mid-market, which has positioned the group as market leaders in their space, he added.
Capitalworks co-founder Darshan Daya said the latest inflow brings the alternative asset manager’s assets under management to over R5bn. Its existing South African portfolio comprises investments in the consumer food, building materials, affordable housing, recycling, healthcare and mining services.
“We have successfully backed leading entrepreneurs and management teams and challenge ourselves to add value alongside our business partners,” Daya said.
With its R2.7bn war chest, the Private Equity Fund II will be searching for a top quality deal flow in key sectors such as healthcare, education, financial services and FMCG.

Garth Willis, partner at Capitalworks Private Equity said these would usually be mid-market companies with strong brands, leading market positions and good growth prospects.

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