SA private equity remains active despite crisis

Private equity investors are continuing to invest in South Africa despite a global credit crunch, with the manufacturing and construction sectors favoured, a key industry player said on Tuesday.

Sanlam Private Equity’s deputy chief executive, Cora Fernandez, said there were more investors interested in unlisted mid-size and small companies.

”There’s a lot of demand for capital in the mid-cap space and there’s a lot of activity for new deals on the smaller side,” Fernandez told Reuters after a media briefing on private equity.

”We’re seeing a lot of activity in the manufacturing space, the construction space and in the technology-driven business.”

Developed world private equity has been hurt by the drying up of credit because many private equity buyouts were previously leverage based. Most emerging private equity deals, however, are cash-based.

A survey by the Emerging Markets Private Equity Association last month showed 78% of institutional investors in global emerging markets were still intending to commit to additional deals over the next five years, with 49% intending to do so within the next two years.

South Africa’s private equity sector contributes 2,8% to the country’s gross domestic product, although it only accounts for 1% of global private equity activity, according to data released by the Southern African Venture Capital and Private Equity Association at the briefing.

Sanlam Private Equity, a unit of financial services firm Sanlam, is one of the biggest private equity players in South Africa with about 54 investments in its portfolio.

Fernandez said she expected private equity activity in Africa’s biggest economy to pick up further in the first quarter of next year. – Reuters

We make it make sense

If this story helped you navigate your world, subscribe to the M&G today for just R30 for the first three months

Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.”

Related stories

WELCOME TO YOUR M&G

Already a subscriber? Sign in here

Advertising

Latest stories

Why government would fall short of cash if the fuel...

But restructuring the Road Accident Fund levy would reduce pressure on consumers

Gordhan’s Eskom ‘blame game’ underwhelms ANC leaders

Sources at a meeting of the national executive committee said a call was made to shift the power utility to Gwede Mantashe’s ministry of minerals and resources

Is your laptop tough enough for the pressures of the...

What is military-grade testing, and why should you opt for a device that’s been put to the test?

UK drivers in go-slow protest over surging fuel prices

Rail workers have already staged a series of stoppages to press for better pay as Britain's headline inflation reaches a 40-year high
Advertising

press releases

Loading latest Press Releases…
×