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South African PE Market is Revitalized

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September 26, 2013

The PE market in South Africa grew by 10.4% this year, according to the latest annual study by KPMG and the South African VC and PE Association. Analysts quoted in the study believe that this year marks the turnaround for the PE market in South Africa.

 

In the calendar year 2012, the local private equity industry added 10.4% to its total funds under management, closing at R126.4 billion. The 2012 growth surpasses the previous four years’ combined cumulative growth of only 4.6%, says the report.

 

This was the thirteenth annual survey. It represents over 90 percent of total South African private equity funds by value. Current funds under management represent a compound annual growth rate of 11.6 percent (excluding undrawn commitments, which is those funds committed by investors but not yet deployed) since the inception of the survey in 1999. (Image source: KPMG and SAVCA Private Equity Survey)

Key findings

• R14.4 billion was raised in 2012 which is an increase from the R10.7 billion raised during 2011

• 56.2% of all funds raised during 2012 were from South African sources (2011: 62.0%). South Africa has been the largest source of 46.0% of cumulative funds raised to date and not yet returned to investors (2011:45.4%)

• Investment activity for independents only, as a % of GDP, was 0.10% (2011: 0.14%). This compares with the UK of 1.05% and the US of 0.86%. Israel remains the highest percentage at 1.81%

• Investment activity is at R10.6 billion during 2012 where it was at R16.5 billion in 2011. Of the R10.6 billion invested, R5 billion was for follow-on investments, and R5.6 billion was for new investments

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