Another boost for black-owned private equity firms
New Seasons Investment Fund, a new black-owned firm, enters the private equity sector.
South Africa’s private equity industry, which has more than R160 billion in assets under management, will see yet another addition of a new and black-owned firm.
A new majority-black controlled private equity fund, New Seasons Investment Fund, has been launched after the merger of two private equity fund companies, New Seasons Investment Holdings and Nodus Equity.
New Seasons Investment Holdings is the Black Economic Empowerment (BEE) partner in the Fidelity Security Group buyout in 2006 and brings investments with a net asset value of approximately R522 million in six private companies. Meanwhile, Nodus Equity is an open-ended private equity investment company, which has concluded deals through a link to both Nodus Capital, a corporate finance advisory firm, as well as New Seasons Investment Holdings.
Its launch is also part of the wave of large private equity firms supporting the launch of black-owned private equity firms by either injecting capital or spinning off some of their assets into newly launched firms.
The tepid performance of public stock exchanges like the JSE in recent years has led retirement funds and asset managers to seek returns in alternative investments, such as private equity and hedge funds. South African investors – retail and institutional – are still underexposed to companies not listed on public stock exchanges, despite private equity outperforming stock market returns.
New Seasons Investment Fund will be managed by New Seasons Investment Management, a newly established 51 percent black-owned investment management company, which pools the experience of investment professionals from both New Seasons Investment Holdings and Nodus Investment Managers.
The new private equity fund will focus on empowering medium-sized enterprises across various sectors in South Africa and will manage private equity investments in excess of R1 billion.
“Both companies [New Seasons Investment Holdings and Nodus Equity] have an established track record and experienced management teams. The new fund and management company’s BEE credentials, experience, board and management teams’ skills and their track record of equity transaction and capital raising strongly positions us within the local market,” said New Seasons Investment Management’s chairman Ashley Mabogoane (pictured).
Ashley established New Seasons Investment Holdings in 1995 together with Peter Vundla, Advocate Kgomotso Moroka, Jabu Mabuza and the late Dr. Enos Mabuza. The company spent 20 years deploying investment strategies to create wealth for shareholders and uplifting historically disadvantaged black South Africans.
More than two decades after white-minority rule ended in South Africa, the country has crafted several policies such as BEE to step up and distribute wealth equally among citizens.
Ashley said New Seasons Investment Holdings’ sector-agnostic investment focus saw healthy deal flows backed by successful capital raisings. “We will continue to apply this effective model for the new fund and invest in companies that require equity capital for growth or provide shareholder support to companies that require active BEE partners,” he said.
The new private equity fund’s focus will also include the social upliftment of historically disadvantaged South Africans, said Ashley.
“We will look to contribute and add value to inclusive economic transformation through our partnership approach and will continue to deliver attractive returns to investors by providing capital, skills, experience, expertise, and our BEE credentials to strategic transactions that offer attractive investment returns,” he concludes.
“The new fund and management company's BEE credentials, experience, board and management teams’ skills and their track record of equity transaction and capital raising strongly positions us within the local market.”