Dear SAVCA Members and Friends,

Private Equity Delivers Vibrant Results

The latest numbers from the RisCura-SAVCA South Africa Private Equity Performance Report, published this week, show that South African private equity continues to outperform the listed equity market. Over ten years the local asset class has delivered a performance of 21,2% (annualised, net of fees), which compares favourably with the 19,6% yielded by the JSE All Share Index over the equivalent period.

In our view, the resilience of private equity returns is in part owing to the long-term focus of the industry, and its strategic and active partnerships with the companies in which fund managers invest. Moreover, South African private equity fund managers increasingly set their sights on benefiting from growth across the African continent, whether by way of cross-border deals which add to their portfolio of investments, or through providing their investee companies with the capital needed for operational expansion into new territories.

Institutional investors in various markets now recognise the valuable exposure that private equity can give them to African growth, in a way that ensures they have a positive, developmental impact in the region. SAVCA invites its members and friends to find out more about the way in which the impact of private equity can be harnessed: “Calculating non-financial ROE” is the title of the SAVCA Master-classes in ESG which will be hosted in a few weeks’ time. Find our interview with the presenter of these sessions, James Brice, CEO of EBS, in our updates section on the website.

More than 140 delegates signed up for the 2014 SAVCA-GIBS Three-Day Foundation Programme in Private Equity, which is in progress until tomorrow. This record-level of attendance is an indication of growing activity in the industry. Look out for forthcoming details on the SAVCA-GIBS Advanced Programme in Private Equity, which will run on 8 October 2014.

This year’s SAVCA Remuneration Survey kicks off this month. The survey report, which is available at no charge to those SAVCA members who submit completed questionnaires, gives valuable insights into industry-wide pay scales for private equity. Please contact research@savca.co.za for more information on the survey and to confirm your participation. The survey questionnaire will be sent to registered participants on 25 August.

Please keep us updated with your news and visit the SAVCA website to find new research, industry updates and upcoming events. We also look forward to sharing more information on the 2015 SAVCA Private Equity conference, to be held in Stellenbosch on 12-13 February next year.

Regards

Erika van der Merwe
CEO: SAVCA

Regulation

AIFMD-Day | Comment by KWM-SJ Berwin
Global legal firm KWM-SJ Berwin comments on the implementation of the Alternative Investment Fund Managers Directive – the regulation which is having a radical impact on hundreds of private equity fund managers across Europe.

A reporting platform for FATCA
This past June SARS signed an inter-governmental agreement (IGA) with the USA which gives clarity on South Africa’s requirements under the US FATCA regime. From the 1st July 2014, South African financial institutions will be required to report information on US citizens to SARS each year. As local private equity partnership structures are grouped in the FATCA category of Foreign Financial Institutions, SAVCA members are required to register on the US FATCA portal by the end of 2014. Given that the FATCA reporting obligation is onerous, a possible solution is to engage a service provider to build a reporting platform to transfer information to SARS. The SAVCA Regulatory Sub-Committee has conducted a scoping exercise to identify potential providers. Please contact the SAVCA office on Research@savca.co.za if you would like further information.

Research

The latest RisCura-SAVCA South African Private Equity Performance Report confirms that the private equity asset class continues to deliver a performance that compares favourably with listed equity.

African pension funds can play a critical role in the region’s private equity industry mobilizing an estimated US$29 billion and driving economic development according to a report titled Pension Funds and Private Equity: Unlocking Africa’s Potential produced by the Common the Commonwealth, the Making Finance Work for Africa Partnership Secretariat (MFW4A) and EMPEA.

SAVCA Events

SAVCA–Edge Growth Enterprise Development Breakfast 
Date:        20 August 2014
Time:       8:00 am to 10:30 am
Venue:    The Venue, 17 The High Street, Melrose Arch.
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 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 on our online calendar.

Industry Events

The Latin America Africa Investors Summit

Date:       12 August 2014
Venue:    The Hyatt Regency, 191 Oxford Road, Rosebank, Johannesburg
Click here for further information

EMPEA Private Equity in Emerging Markets 2014 I 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

SuperReturn Africa 2014
Attend SuperReturn Africa this December in Cape Town to meet, network and exchange ideas with the very best managers with a solid track record of investing in Africa
Dates:      2 December – 4 December 2014
Venue:     The Westin, Cape Town
• Join 500+ private equity professionals
• Meet 150+ local and international LPs
• Hear from 130+ industry leading speakers
• 30+ countries represented
• 2 pre-conference summits – The West Africa Summit OR The Fundraising Summit
SAVCA members can benefit from an exclusive 20% discount. Please quote VIP code: FKR2356SAVCA1 when registering. For more information or to register online, please visit: www.superreturnafrica.com/FKR2356SAVCA1

SAVCA in the news

South African Private Equity sustains its outperformance I SAVCA media release

The RisCura-SAVCA South African Private Equity Performance Report received positive coverage in the media including Polity.org.za, Engineering News, ITI News, African Asset Management. SAVCA CEO Erika van der Merwe was interviewed on CNBC Africa and Fine Music Radio. 

SA private equity investment has room to grow I Engineering News
The amount of funds allocated to private equity investments in South Africa is significantly below the international average, presenting a potential boon to company growth prospects and early-stage venture capital.

Legislative changes to positively impact venture capital industry I Engineering News 
SAVCA discusses two new proposed changes to South Africa’s Income Tax Act, coming into effect in April 2015, would significantly enhance the attractiveness of the tax incentives available to venture capital investors and stimulate greater levels of investment into small and medium-sized businesses.

SAVCA members in the news

PIC targets top JSE firms in a bid for growth I BDlive
The PIC plans to partner with top JSE-listed companies in key economic sectors, in a new strategic thrust to act as a catalyst for economic growth. Key sectors include infrastructure, oil and gas, construction, mining, health, education, affordable housing, renewable energy and agriculture. In addition, 3% of the total portfolio will be invested in private equity assets.

African private equity deals better prices than those globally I How we made it in Africa
Industry players comment on the development of the private equity in Africa. While Africa is perceived as riskier for investors, it also means there is less competition for deals compared to develop. Ethos Private Equity partner Ngalaah Chuphi comments “it is the right time for investors to seriously look into Africa”.

Actis exits Alexander Forbes, Mercer enters I Ventures Africa
Private equity investor Actis has sold 9 percent of its 13 percent stake in Alexander Forbes in an oversubscribed offer through the Johannesburg Stock Exchange. Actis will fully exit the pension manager when Mercer Africa Limited completes its 34 percent acquisition.

Phatisa announces new partner to its team I How we made it in Africa 
Phatisa welcomes the appointment of Peter van As, a seasoned commercial professional, in joining the firm as Partner: Portfolio Management.

IDC launches $8.5M black filmmakers fund in South Africa I AFK Insider
The Industrial Development Corporation together with the Department of Trade and Industry and the National Film and Video Foundation have launched a new R90 million fund to bankroll emerging black South African filmmakers.

Industry news and insights

Finding the best fund managers is more complicated than checking past performance I WSJ
A new study shows that skilled private-equity fund managers can outperform their peers, with the top firms generating an extra seven to eight percentage points in annual returns. Yet even for investors with extensive resources to research investments, it can be hard to separate the stars from the flops.

New East Africa focussed private equity fund raises $50 million I AFK Insider
Ascent Capital, a new Kenyan based private equity firm, has raised $50 million for investment in a couple of fast growing small and mid-sized firms across east Africa. The firm, which has offices in Kenya, Uganda and Ethiopia, will invest between $1 million and $9 million in 12 companies across the region.

Pension funds hold cash for private equity investment in Africa I WSJ
African pension funds have $29 billion available to invest in private equity firms that are seeking to buy stakes in companies across the continent, according to a report by the Emerging Markets Private Equity Association (EMPEA).

West Africa trumps Southern Africa as top private equity destination I Ventures Africa
The 2014 Deloitte’s East Africa Private Equity Confidence Survey shows that West Africa raked in more private equity deals than Southern Africa and Eastern Africa for the third consecutive year.

Abraaj overlooks SA’s problems in order to invest I BDlive
Sev Vettivetpillai a partner at the Abraaj Group was in South Africa looking to structure some major deals after a highly successful exit from SA-based oil and gas services company Southey last year.

How to raise venture capital I Forbes
Perspectives from US tech entrepreneur Jerry Jao on the most common mistakes inexperienced entrepreneurs make when approaching potential investors.
 

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.