Dear SAVCA Members and Friends,

South Africa’s Private Equity Investors Positive on Local Outlook

The recently released Global Venture Capital Confidence Survey produced by Deloitte and the U.S National Venture Capital Association (NVCA) and supported by SAVCA, incorporates the views of South African private equity and venture capital fund managers for the third year running, alongside managers from fifteen other countries.

On a scale of 1 to 5, with a higher value indicating greater confidence, the survey findings show that only Singapore (3.67) was ranked ahead of South Africa (3.5), which was matched by Brazil (3.5), when local investors were asked to rank nations according to their attractiveness for private equity.

Our perceived local attractiveness is ahead of India, the US, Germany, Australia and China. Interestingly, this positive local sentiment is almost matched by that of global investors who ranked South Africa’s private equity appeal at 3.27, just behind China at 3.28 and not far off the top-ranked US at 3.78.

Given the growing body of evidence that global investors are looking with increasing appetite at the African region, this relatively firm ranking for South Africa seems to have merit.

For instance, data released last week by the Emerging Markets Private Equity Association (EMPEA) show that while emerging Asia still attracts the lion’s share – 76% of the US$20 billion raised in the first half of 2014 in emerging markets – Sub-Saharan Africa has gained the most ground, accounting for 11% of funds raised during this period. This is the highest share the region has achieved to date, which EMPEA attributes to global fund managers making first-time investments on the continent and a lessening perception of risk.

On fundraising by South African-based private equity fund managers, the LP panel at the recent SAVCA-GIBS Three-Day Foundation Programme in Private Equity provided several valuable insights. Representatives from the Public Investment Corporation (PIC), Government Employees Pension Fund (GEPF), Eskom Pension and Provident Fund and the DEG participated in a candid discussion about fund manager selection criteria and discussed their expectations of the local industry. Amongst other words of advice, panellists urged fund managers who are pitching for funds to focus on differentiating themselves clearly from competitors. Photos from this session, and from all three days, are available online.

We expect further robust conversation at the SAVCA-GIBS One-Day Advanced Programme in Private Equity, on 8 October 2014. The course is On successful deal completion: Managing the deal process from due diligence and negotiation, to structuring, approvals and sign-off.

Yesterday, SAVCA, ASISA and Edge Growth hosted an industry information session on the implications of the revised BEE codes for private equity, with a focus on enterprise development (hyperlink to photos and presentations).  In this edition of the newsletter we chat to Daniel Hatfield, Managing Director of Edge Growth and a SAVCA board member, about the latest thinking in this space.

Have a look at the two private equity positions advertised on the SAVCA Jobs Portal. More information is available below.

Please keep us updated with your news and visit the SAVCA website to find new research, industry updates and upcoming events.

Regards

Erika van der Merwe
CEO: SAVCA

Research

This week we bring you the first of six videos in the SAVCA-EY Excellence in Exits Video Series, illustrating private equity exit experiences in Southern Africa. The series features the insights and experiences of SAVCA members and includes references to case studies. Enjoy!

SAVCA Events

SAVCA Master-Class in ESG: “Calculating non-financial ROE”
JOHANNESBURG`
Date:        25 August 2014
Time:        Arrival at 8:00 am and course to end by 1:00 pm
Venue:     Bowman Gilfillan, 165 West Street, Sandton, Johannesburg
CAPE TOWN
Date:        8 September 2014
Time:        Arrival at 8:00 am and course to end by 1:00 pm
Venue:     Bowman Gilfillan, 22 Bree Street, Cape Town
Click here for further information

SAVCA Venture Capital Foundation Training Course
Date:        8 to 9 September 2014
Venue:     FNB Conference and Learning Centre, Sandown, Johannesburg
Cost:        SAVCA members pay R6 750; qualifying entrepreneurs pay R6 750; others pay R7 750
Click here for further information

SAVCA Master-Class in Competition Regulation
Session 1: Abuse of dominance – the next priority for the Competition Commission? Implications for investors
Date:        11 September 2014
Time:        2 pm to 5 pm
Venue:     Webber Wentzel, 10 Fricker Road, Illovo, Johannesburg
Cost:        SAVCA members pay R2000, non-members pay R2500
RSVP:      Booking is essential: The SAVCA Office on events@savca.co.za  or +27-11 2680041
Click here for further information

SAVCA Master-Class in Competition Regulation
Session 2: The economics of competition law – how authorities assess the competitive effects of transactions and contracts, and the implications for investors 
Date:        18 September 2014
Time:        2pm to 5pm
Venue:     Webber Wentzel, 10 Fricker Road, Illovo, Johannesburg
Cost:        SAVCA members pay R2 000; non-members pay R2 500
RSVP:      Booking is essential: The SAVCA Office on events@savca.co.za or +27-11-2680041
Click here for further information

Ensuring Successful Private Equity Fundraising in the US and Europe
Presentation by Solomon Wifa, Managing Partner of O’Melveny & Myers
Date:       18 September 2014
Time:       4:45 pm to 6:30 pm
Venue:     Mini Auditorium, GIBS, 26 Melville Road, Illovo, Johannesburg
RSVP:      Booking is essential: The SAVCA Office on events@savca.co.za or +27-11 2680041
Click here for further information

Keep up to date with all our events and courses by regularly visiting the SAVCA online calendar.

Industry Events

EMPEA Private Equity in Emerging Markets 2014 | Tapping Global Growth and Driving Returns

Date:        14 October 2014
Venue:      InterContinental Park Lane, London
Leveraging the expertise of the Financial Times’s global markets coverage and EMPEA’s insight into long-term, growth capital investments, Private Equity in Emerging Markets is returning to London this October to explore the latest developments in emerging markets private equity
Click here for further information

EMPEA Private Equity in Africa 2014 | Achieving Africa’s Economic Potential
Date:        15 October 2014
Venue:      InterContinental Park Lane, London
The Financial Times and EMPEA will once again convene the African private equity industry in London for the sixth annual summit
Click here for further information

SAVCA in The News

SA investors confident in attractiveness of domestic market I SAVCA Press Release
Results of the latest annual Global Venture Capital Confidence Survey from professional services firm Deloitte and the U.S. National Venture Capital Association (NVCA) indicate that South Africa private equity fund managers remain confident about the attractiveness of their home market.

Tax amendments to strengthen South Africa’s venture capital industry I Africa Assets
SAVCA comments on the recent amendments to South Africa’s venture capital company tax regime.

SAVCA Members in The News

Made in Africa I Quarterly Newsletter 
King&Wood Mallesons SJ Berwin’s quarterly review of the pertinent international and local legal considerations for investors in and from Africa.

Grindstone proves acceleration model with massive growth I Knife Capital Press Release
Venture capital firm Knife Capital’s entrepreneurial leadership programme, Grindstone, has completed its first year with all ten participating companies experiencing an average growth rate of 61 percent.

Carlyle co-CEO sees Africa private equity ‘explosion’ I Bloomberg
Carlyle Group LP Co-Chief Executive officer David Rubenstein said the private-equity industry “will take off” in Africa as his company and Blackstone Group LP backed energy partnerships with the continent’s most prominent billionaire Aliko Dangote.

Foreign inflows for affordable housing I eProp Commercial News
Foreign investment into International Housing Solutions’ second private equity fund is set to create  over 20 000 new homes in a major boost to affordable housing Also known as ‘inclusionary housing ‘which essentially is low-cost social housing aimed at the lower-income sector of the market. in SA.

Unwrapping the mysteries of SA’s venture metric landscape I Ventureburn  
A survey conducted by Knife Capital of 337 entrepreneurs provide interesting insights about what they think their business is worth, how the founders met as well as their risk assessment.

IDC grows green energy assets to R15bn I BDlive
The Industrial Development Corporation (IDC) has achieved its target of investing R5bn a year in green energy projects with a portfolio now sitting at about R15 billion.

Industry News and Insights

Is your pension fund investing too conservatively? I Moneyweb
There is a very real threat that investors might be investing too conservatively for retirement. This article discusses the relative outperformance that could be created by taking more risk through increased exposure to equities, hedge funds, private equity and Africa.

Africa’s high growth makes it a private equity target | Institutional Investor
Africa’s high growth sectors are attracting investment interest from both local and foreign players. Investors say that the consumer and infrastructure sectors hold the most appeal.

Temasek: Africa’s emerging market ally I Ventures Africa 
Temasek the $178 billion Singaporean sovereign wealth fund is positioning itself to benefit from Africa’s growth. Temasek’s spokesman Stephen Forshaw comments that Africa’s opportunities are consistent with the themes that drive the fund’s investment approach.

Asian private equity firms can’t rely exclusively on growth anymore I WSJ
Sluggish growth in China and India is forcing private equity firms in the region to work harder to achieve their targets. Research indicates that private equity partners in Asia lag behind their Western counterparts when it comes to value creation in portfolio companies.

Africa needs bigger pool of directors for better corporate governance I BDlive 
The African Corporate Governance Network aims to lobby governments to improve continent-wide governance standards, but also help grow the pool of company directors, which is says it way to small.

Finding the right angel for you I Lexology 
Babak Yaghmaie from Cooley LLP discusses the best ways that entrepreneurs can find the right angel investor.

 

Job Opportunities

Private Equity Senior Investment Manager I Symbiotics I Cape Town
Symbiotics is a large independent asset manager dedicated to sustainable and impact investments in emerging markets. They are looking for an experienced Investment Manager with experience with microfinance institutions in Sub-Saharan Africa and transforming them into leading sustainable banks.

Private Equity Senior Deal Executive I African Alliance I Cape Town
African Alliance is looking for a Senior Deal Executive to play a significant role in the Private Equity business on the African continent. The successful candidate will provide direction and leadership towards achievement of the business unit’s strategy and annual goals.

Contact info@savca.co.za to advertise an opening at your firm on our online jobs portal.

 

Advertising with SAVCA

SAVCA welcomes the opportunity of working with members and stakeholders in promoting the Southern African private equity and venture capital industry. The organisation constantly seeks creative ways of doing so, including through the marketing member firms’ activities. Should you wish to find out more about various marketing and advertising opportunities with SAVCA, contact the office on info@savca.co.za. Please also drop us a line if you would like to advertise an opening at your firm on our online jobs portal.