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The SA venture capital and private equity industry responds to the Covid-19 crisis

The Covid-19 epidemic is an unprecedented public health and economic crisis. The private equity and venture capital industry manages R175-billion of investments in private companies, mostly small- and medium-sized businesses, on behalf of pension funds and other investors. We are at the front line of working with particularly small- and -medium sized companies to confront the crisis.

Our members are urgently engaged with their portfolio companies to support them in facing the challenges presented by the pandemic. This includes both managing market disruption and helping companies rapidly shift strategy to better cater for public needs. However, while the industry has experienced difficult economic cycles, the economic challenges presented by the pandemic are unprecedented. Our members are specialists in helping companies adapt to change and manage challenges. We will bring all the tools in our arsenal to help companies problem solve as active owners of businesses working closely with management teams.

President Cyril Ramaphosa and his ministers have taken decisive leadership in confronting the pandemic, with the support of civil society, business, opposition politicians and others. The SA Venture Capital and Private Equity Industry Association (SAVCA) has produced a paper to contribute to policy thinking, as requested by National Treasury among others.

In it, the industry calls for:

•            UIF to be used to help companies retain workers on payroll during the crisis when they cannot work

•            The Solidarity Fund to be leveraged through a guarantee scheme to enable to lending industry to support individuals and businesses through concessionary loans to bridge the period of the crisis to ensure they return to full production at the end of it

•            Business and end consumers to, where possible, keep up purchasing and expenditure to minimise the knock-on effect on the broader ecosystem. Priority should be given to shoring up vulnerable labour and communities as well as suppliers and customers so that we can give effect to a sharper recovery on the other side of the crisis.

The private equity and venture capital industry is also working hard with investee companies to:

•            Confront the health emergency by expanding capacity in needed supplies and working to ensure public health and safety and access to resources needed during this period

•            Support workers to protect jobs and manage the impact of the measures to be taken

•            Support the economy by protecting supply chains and shifting the strategies of companies to support the public effort.

•            Prepare its investee companies for a return to growth and contribution to economic recovery.

Full details are contained in the attached report.

For more details, please contact:

Tanya van Lill



T: +27 11 268 0041