In association with Ethos Private Equity targets R10bn to help restore SA’s economic health.
Firms see the investment community as having a key role to play in post-COVID economic recovery.
JSE- and LSE-listed investment manager Ninety One has launched an impact investment initiative – the Ninety One SA Recovery Fund, in association with Ethos Private Equity, one of South Africa’s leading alternative asset managers. The fund’s objective is to support the preservation of the country’s productive capacity and economic recovery from the effects of the COVID-19 pandemic, while seeking an attractive return for investors.
With a focus on the urgency of the economic situation in SA, Ninety One is targeting a first close of the fund in July 2020. Ninety One will be targeting a fund size of R10bn, with funding raised via two closes from South African institutional investors.
The fund aims to achieve a positive impact with attractive returns via a clear set of investment outcomes. Priorities for the fund are to protect SA productive capacity during the next 24 months, preserve jobs and protect permanent loss of equity value. 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 fund will initially seek to attract support from the country’s institutional investors. In addition, subject to the necessary regulatory enablement, Ninety One is hopeful that retail investors in South Africa will be able to access the Ninety One SA Recovery Fund. In other parts of the world, during the past five years, closed-end mutual funds have been created to facilitate retail investment into long-term assets.
Hendrik du Toit, Founder and CEO of Ninety One said: “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. The SA Recovery 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.”