22 September 2022: According to the latest Southern African Venture Capital and Private Equity Association (SAVCA) Private Equity survey for 2022, PE firms have shown a significant improvement in gender diversity, showing that the proportion of firms with more than 50% of women in their organisation has grown year-on-year.

Further data indicates that for the 2021 period, 17% of firms have improved gender diversity compared to 2020, with 50% of women in front office roles, as opposed to 12% in 2020.

The survey, which covers investment activity for the 2021 period ending in December, was launched at the EY offices in Sandton on Wednesday, the 21^st of September, where a host of fund managers and industry stakeholders were in attendance.

The annual survey is recognised as one of the most detailed and comprehensive of its kind and provides a snapshot of the state of the industry, identifying key insights, challenges and trends that are shaping the private equity landscape in Southern Africa.

The survey shows that 51% respondents are more than 50% black-owned, with 65% having more than 50% black management. More funds are also being managed by higher B-BBEE rated firms than in previous years.

Speaking at the launch, SAVCA Acting CEO and Head of Policy and Regulation Shelley Lotz said:  “We are pleased to see the PE industry continue on its transformation journey in 2021. Our findings tell us that increasing gender representation was the top priority in hiring and onboarding talent for Southern African PE firms, with significant improvements being made in their overall gender diversity from 2020 to 2021.”

Commenting on the industry as a whole, presenter of the survey’s findings, Gergana Ivanova, EY Data and Technology Leader Strategy and Transactions: Africa, pointed to increased investment activity in 2021 as compared to 2020. She noted that the uptick in investment activity is indicative of the resilience of the private equity industry.

“In 2021 PE investments totalled R14.9 billion, compared to R14.5 billion in 2020. The increase was driven by a 2.5 times rise in the value of new investments from R4.3 billion in 2020 to R10.6 billion in 2021. The industry has proved its resilience during uncertain times and this has set it on a trajectory of recovery and growth,” she said.

Funds under management across the industry increased to R206.2 billion as at 31 December 2021, up 5.7% from the R195.1 billion seen at the end of 2020. Undrawn commitments at R39.5 billion represents 19.2% of FUM, an increase of R3.6 billion from the R35.9 billion recorded at the end of December 2020.

While these are positive indicators that progress is being made, Mamedupi Matsipa, CEO of Ata Capital asserts that more needs to be done in terms of gender diversity at top-level management. “There are some areas in which improvements can be made. We note that board level gender diversity is not where it needs to be – the number of PE firm boards that have less than 10% female representation increased from 36% to 44% between 2020 and 2021. There’s no doubt we need to see more women on boards going forward, and to do this – we need to place a huge focus on not only attracting diverse talent, but also supporting them as much as possible once they have been onboarded”

Given that there has been an increased focus in infrastructural development in Southern Africa, it comes as no surprise that this sector attracted the largest portion of investments – 20.4% – for the 2021 period.

Commenting on what PE firms in Southern Africa can do to bolster the performance of the sector moving forward, Mike Donaldson, CEO of RMB Corvest, who spoke on the panel said: “We believe that if the Southern African PE market wants to compete on a global scale, it is imperative that the smaller PE funds explore ways in which they can either merge or collaborate with one another, which would thus enable them to combine not only the experience of their fund managers and staff talent, but it would also give them access to a much larger allocation of capital. At present, we believe there are merely too many individual funds competing against one another, which is preventing them from achieving true growth and optimised performance.”  

The SAVCA 2022 Private Equity Industry Survey is presented by SAVCA and EY. The survey was based on responses from Private Equity firms operating in Southern Africa and covers the analysis of the industry’s strategic priorities, investment and divestment activity, fundraising, funds under management, the impact of private equity, BBBEE and the diversity of PE investment.

Lotz concludes: “As always, SAVCA remains unwavering in our commitment to support our members and the wider PE ecosystem. We hope that the information included in this report will be useful to our stakeholders as we all continue in our endeavours to grow, transform and improve the Southern African PE sector, and position is as the asset class of choice for investors.”