Ethos Private Equity, an independent South African private equity firm, has closed Ethos Fund V on R5.5 billion ($750 million; €589 million), the largest fund in Africa and more than double the size of its predecessor.
Strategic investors, such as Teachers’ Private Capital, can also co-invest alongside so Ethos can tackle larger deals.
It has already completed three transactions in South Africa from the fund: Kanderlane, an electronics payment specialist; Plumblink, a plumbing company, and the recently announced buyout of Moresport, a sports retailer.
Ethos specialises in medium-to-larger South African and African buyouts, growth capital and niche privatisation opportunities, where there is a need to address ownership change, and in particular Black Economic Empowerment transactions.
Black Economic Empowerment is a programme launched by the South African government to redress the inequalities of Apartheid by giving previously disadvantaged groups such as black Africans and Indians economic opportunuties previously not available to them.
It includes measures such as employment equity, skills development, targets for ownership, management and preferential procurement.
André Roux, Ethos’s chief executive, said: “To date, Black Economic Empowerment transactions account for approximately 45% of Ethos’ investments since 1992. Ethos has an unmatched track record and we are proactive in seeking new opportunities involving meaningful black ownership and participation.”
Roux said: “Ethos’ own partnership transaction with Sphere Holdings, a black-owned and managed company, in 2004, has created a new BEE player in the South African private equity field. Ethos is partnering Sphere to raise its maiden private equity fund, Sphere Fund I, which has already begun its investing programme.”