Startups and businesses in South Africa have a new fund. Investment fund manager Ninety-One, formerly Investec, in partnership with a private equity firm, has launched a R10 billion fund ($600 million) that will target investments in South African businesses under stress from the coronavirus pandemic, and the resulting lockdown in the country.
“The lockdown, while necessary to protect the nation’s health, has been akin to putting the economy into an induced coma. South Africa faces a once-in-a-generation economic challenge,” said Hendrik du Toit, founder and chief executive officer of Ninety One.
Here Is What You Need To Know
Dubbed the SA Recovery Fund, the fund is a market-led, impact initiative to mitigate the negative economic impact of the Covid-19 pandemic, while seeking a commercial return.
“With this fund, we would like to support quality businesses and protect the nation’s productive capacity, which will in turn preserve thousands of jobs and support the South African tax base,” Hendrik said.
Priorities for the fund are to protect South Africa’s productive capacity during the next 24 months, preserve jobs and protect permanent loss of equity value.
Ninety-One said that the fund will consist of a concentrated portfolio with an appropriate mix of senior and subordinated debt, preferred equity, listed equity and private equity with a deployment time horizon of 18 to 36 months.
The company was formed as Investec Asset Management in 1991. It changed its name to Ninety One in spring 2020:
How South African Startups May Obtain Funds From The Newly Launched Fund
Although the new fund is currently being raised from investors by Ninety-One, it may well be the best time for startups in South Africa to position themselves well for the closure of the fund.
Read also:https://afrikanheroes.com/2019/09/21/west-african-countries-to-adopt-technology-for-disease-control/
Investec has previously invested in startups such as Omnisient, a Cape Town-based startup that specializes in secure data sharing for businesses. Other investments include those made in Dresden Optics, MadeComfy, and ICM Airport Technics.
However, it should be noted that the company invests largely in companies outside the shores of Africa. It is only hoped that its recent re-branding and the focus of the newly launched fund would propel it to invest more in startups based in South Africa and Africa, at large.
For more information visit Ninety One’s website here.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.