SA private equity industry sees growth in FUM and returns

SAVCA 2017
Private Equity Industry Survey
SAVCA Venture Capital and Private Equity Industry Performance

Survey of Southern Africa covering the 2016 Calendar Year
Research Partner
TLG6777
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Contents
Foreword 2
Highlights 4
Funds under management 8
Fund raising activity 18
Investment activity 24
Analysis of BEE investment 32
Exits 34
Performance 40
Private equity investment professionals 44
Data tables 46
Participants 48
Sources of information 52
Glossary 54
SAVCA 2017 Private Equity Industry Survey | 1

Foreword
The SAVCA Private Equity Industry Survey is now in its seventeenth year of production and is
regarded as one of the most comprehensive and relevant surveys of its kind. As the industry
representative for Southern Africa, SAVCA is pleased to publish this report which covers the
2016 calendar year and provides our stakeholders with a greater understanding of trends in this
exciting industry.
A significant theme of this survey is the capital returned to investors, which increased by 123.2%
from R8.2 billion during 2015 to R18.3 billion in 2016. Trade sales were reported as the most
popular exit route in value terms whilst sales to management were the most popular by volume.
Realisations in 2016 reflected a times money multiple of 2.0, a step up from the 1.4 reported in
2015. Private equitys 10-year performance, relative to the listed market, remains favourable over
a 10-year period with a Pooled IRR of 15.8% as at December 2016.
The growth in funds under management from R158.8 billion in 2015 to R171.8 billion in 2016 is
reflective of a growing industry and an increased interest from investors to invest in the private
equity asset class in Southern Africa. This growth represents a compound annual growth rate of
11.4% since the inception of the SAVCA Private Equity Survey.
Funds raised in 2016 were R10.2 billion, the majority of which were sourced from South Africa,
and although significantly lower than the R27.5 billion raised in 2015, the substantial increase
in capital returned to investors is indicative of the private equity life-cycle and the ability of our
industry to remain agile to changing market conditions. It is notable that the survey reveals that
the bulk of capital raised in 2016 (R7.0 billion) is for early stage investments.
The cost of investments made in 2016 totalled R15.5 billion, of which R5.4 billion was for follow-on
investments and R10.1 billion was for new investments. Investments were mainly channelled
into real estate, information technology, energy and services. Of the R90.6 billion of unrealised
investments as at December 2016, infrastructure comprises 22.6% whilst 12.9% has been invested
into manufacturing and 7.6% into banks, financial institutions and insurance.
Private equity remains an enabler and facilitator of BEE shareholdings in South Africa. The survey
analysis indicates that in 2016, 44.7% of the investments made were in companies with BEE ratings
of level four or better.
SAVCA thanks its members for completing the survey. Your input enables meaningful research
to be published by SAVCA on trends in private equity in Southern Africa. SAVCA also wishes to
thank KPMG, our research partner, which was responsible for collating, processing and analysing
the large volume of data. We are grateful to Michael Rudnicki and Bridget Blackburn both of
KPMG for their commitment to this survey.
Tanya van Lill

CEO: Southern African Venture Capital and Private Equity Association
2 | SAVCA 2017 Private Equity Industry Survey

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SAVCA 2018 Private Equity
in Southern Africa Conference
2122 February 2018

Spier Wine Farm,
Stellenbosch, South Africa
Network with private equity managers, institutional
investors, advisors and regulators at this world-class event,
in the summer setting of the Stellenbosch Winelands!
www.savca.co.za | +27 (0) 11 268 0041 | info@savca.co.za | @savca_news

Highlights
Southern Africas private equity industry, including both government and private funds, had R171.8 billion in funds under
management (FUM) at 31 December 2016, an increase from R158.5 billion at 31 December 2015. This represents a
compound annual growth rate of 11.4% since 1999, when the survey first began.1
Of FUM at the end of 2016, R58.2 billion was in undrawn commitments. R24.6 billion was available for future
investments exclusively in South Africa and R33.6 billion for Pan Africa (the latter includes the mandate to invest
in South Africa and the rest of Africa).
Of the R58.2 billion in undrawn commitments, 94.2% is committed to Independents (R54.9 billion), 2.7% to Captives
Financial Services (R1.5 billion), 2.2% to Captives Government (R1.3 billion) and 0.9% to Captives-Other (R0.5 billion).
R10.2 billion was raised in 2016, a significant decrease from the R27.5 billion raised in 2015. The bulk of funds raised in
2016 (R7.0 billion or 68.6%) is for early stage investments.
Of funds raised during 2016, 73.5% were from South African sources (2015: 28.4%). South Africa has been the source of
43.3% of cumulative funds raised to date and not yet returned to investors (2015: 40.1%).
Investment activity for Independents only, as a percentage of GDP, was 0.26% (2015: 0.27%). This compares with 1.81%
for the UK, 1.70% for Israel and 1.54% for the US.
The cost of investments totalled R15.5 billion during 2016, compared to R12.5 billion in 2015. Of the R15.5 billion
invested, R5.4 billion was for follow-on investments, and R10.1 billion for new investments.
Funds returned to investors in 2016 totalled R18.3 billion, a 123.2% increase from the R8.2 billion returned to investors
during 2015.
1
Comparative data for 2015 may have been restated by participants for errors or omissions. In addition, 2015 data may also have
been restated for the inclusion/exclusion of funds that did or did not participate in the 2016 survey.

Highlights
Composition of total FUM (Rbn)
Captives Government
Independents
Captives Financial Services
171.8
Captives Other 28.2
158.5
Investment Holding Company 150.3 26.6 108.0
18.3 97.5 31.2
127.0 4.4
19.0 90.5 31.2
114.2 114.5 114.0 32.6 3.2
21.1 24.0 17.6 59.0
109.4 30.3 8.9
105.4 54.8 57.6 58.7
14.0 12.1 11.4
24.0 21.7 27.6
86.3 53.7 48.3 7.3
12.3 10.3 9.4
12.3 31.2 39.7 2.0 0.9 0.7
42.9 10.5 5.3
59.2 24.7
10.1 6.4
39.3 39.7 42.5 24.5
35.9 37.0 7.0
7.1 6.2 5.2 5.8 18.4
15.2 14.2 13.9 6.2
13.3 12.0 13.9
5.2 8.3 10.2 11.9
8.7 7.8 7.7
10.3 10.5
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Third-party funds raised during 2016, analysed by fund stage (Rbn)
Late stage
27.5
26.0
Early stage 1.5
15.4
15.3
14.5 0.1
14.5 11.8
11.4 11.3
10.6 10.7 11.1
11.2 11.1 10.2
8.5 9.9 0.7
0.2 0.2 3.2
2.1 0.8 7.0
4.9
4.2 3.6 3.6
0.7 3.3 2.2
1.1 1.3 2.2 2.2 0.3 1.4
0.6 1.1 2.2 2.2
0.5 0.2
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Highlights
Funds returned to investors during 2016 (Rbn)
Pepkor & Premier disposal (R5.2 billion)

Venfin disposal (R8.8 billion)
Vodacom disposal (R16.0 billion)
Funds returned to investors
5.2
8.8
16.0
1.0 1.5 2.4 4.5 4.0 4.4 10.5 6.2 2.0 9.3 20.5 7.0 9.8 11.0 8.2 18.3
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Cost of investments made during 2016, analysed by new and follow-on investments (Rbn)
Follow-on investments 26.1
New investments 1.4
18.9
16.5
15.5
13.9
13.4
12.5
11.8
11.1
8.2
5.4
8.8 5.8 6.2 4.7

6.9 7.2
6.5 5.6 5.0
1.5
4.3 1.8 4.5 2.9
2.4 3.5 0.7 1.3
0.4 1.4
2.0 2.1 3.6 4.7 3.2 5.4 24.7 10.7 4.3 6.2 7.7 6.1 7.6 7.7 7.8 10.1
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Funds under management
The survey reflects that the Southern African private equity industry has a total of R171.8 billion in FUM. This is a
R13.3 billion increase from the R158.5 billion in FUM at 31 December 2015.2
The industry has achieved a compound annual growth rate of 11.4% in total FUM since 1999, when the survey
began.
FUM by Independents have increased by R10.5 billion, from R97.5 billion at 31 December 2015 to R108.0 billion
at 31 December 2016.
Total FUM by Captives Financial Services remained the same for 2015 and 2016, at R31.2 billion.
The Captives Government category increased from R26.6 billion in 2015 to R28.2 billion in 2016.
Total undrawn commitments at 31 December 2016 reached R58.2 billion (2015: R48.9 billion), of which R54.9 billion
(2015: R43.2 billion) reflects the undrawn commitments of independent fund managers.
Private equity fund managers predominantly have a generalist mandate, with some 61.0% of the FUM at 31 December
2016 in the category Generalist.
2
Pan-African funds have an element of undrawn commitments that may be invested in South Africa or other African countries not specified.

Figure 1 | Total FUM
Independents
Captives Government
Captives Other
2.6%
16.4%
2016
R171.8 bn
18.1%
62.9%
2.0%
16.8%
2015
R158.5 bn
19.7%
61.5%

Figure 2 | Composition of total FUM (Rbn)
Captives Government
Independents
Captives Other
Investment Holding Company
171.8
158.5 28.2
150.3 26.6 108.0
18.3 97.5 31.2
127.0 4.4
19.0 90.5 31.2
114.2 114.5 114.0 32.6 3.2
21.1 24.0 17.6 59.0
109.4 30.3 8.9
105.4 54.8 57.6 58.7
14.0 12.1 11.4
24.0 21.7 27.6
86.3 53.7 48.3 7.3
12.3 10.3 9.4
12.3 31.2 39.7 2.0 0.9 0.7
42.9 10.5 5.3
59.2 24.7
10.1 6.4
39.3 39.7 42.5 24.5
35.9 37.0 7.0
7.1 6.2 5.2 5.8 18.4
15.2 14.2 13.9 6.2
13.3 12.0 13.9
5.2 8.3 10.2 11.9
8.7 7.8 7.7
10.3 10.5
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Figure 3 | Composition of total FUM at 31 December by the focus of the fund (Rbn), includes Pan-African funds*
Agri and Agri processing

Energy and related
Financial Services
General
Healthcare
ICT
Infrastructure
Other
Real Estate
1.7%
4.1%
7.5%
61.0%
2016
1.3%
R171.8 bn
0.3%
8.7%
9.8%
5.6%
2.3%
0.1%
10.1%
65.8% 2015
1.5% R158.5 bn
14.3%
3.5%
2.4%
* The total FUM includes Pan-Africa funds which have an element of undrawn commitments that may be invested in South Africa.

Figure 4 | Total FUM, split by undrawn commitments and amounts invested (Rbn)
Undrawn commitments
Invested 171.8
158.5
150.3
127.0
114.2 114.5 114.0 58.2
109.4 41.6 48.9
105.4
86.3 30.6 39.3

35.9 33.3
40.6 35.0
59.2
31.6
39.3 39.7 42.5
35.9 36.9
25.3
7.7 7.9 13.8 13.8 16.0
28.2 29.0 25.5 25.9 26.5 33.9 54.7 68.8 70.4 78.3 83.9 80.7 87.7 108.7 109.6 113.6
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Figure 5 | Total FUM by type split by undrawn commitments and amounts invested (Rbn)
Undrawn commitments (R58.2 bn) Undrawn commitments (R48.9 bn)

Invested (R113.6 bn) Invested (R109.6 bn)
108.0
97.4
54.9 43.2
31.2
28.2 26.6
1.5 31.2
1.3 0.3
5.2
3.3
4.4 0.2
0.5 3.1
53.1 29.7 26.9 3.9 54.2 26.0 26.3
Independents Captives Captives Captives Independents Captives Captives Captives
Financial Government Other Financial Government Other
services services
2016 2015

Figure 6 | Total FUM at year end, split by amounts invested and geographical undrawn commitments (Rbn)
Undrawn commitments Pan Africa + Rest of Africa + Outside Africa

Undrawn Commitments South Africa
Invested
171.8
158.5
150.3
22.3 33.6
16.9
127.0
114.2 114.5 114.0 24.6
109.3 105.4
15.8 24.7 26.6
13.4 15.4
15.5 17.7
86.3 15.0 23.5
17.2 17.9
18.2
25.0 20.0
59.2
31.6
39.3 39.7 42.5
35.9 36.9
25.3
7.7 7.9 13.8 13.8 16.0
28.2 29.0 25.5 25.9 26.5 33.9 54.7 68.8 70.4 78.3 83.9 80.7 87.7 108.7 109.6 113.6
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Figure 7 | Classication of undrawn commitments by stage of investments (Rbn)
Late stage
Early stage
58.2
48.9
40.5 41.6
35.0 35.9 34.9

33.3
30.6
50.8
25.2 28.3
36.8 35.5 31.1 40.5 48.4
33.1 1.1
3.7 1.9 0.4 5.4 5.0 3.8 0.5 7.4
2008 2009 2010 2011 2012 2013 2014 2015 2016

Figure 8 | Classication of undrawn commitments by type of fund manager (Rbn)
Captives Government
Independents
58.2
Captives Financial Services 1.3
54.9
Captives Other 1.5
48.9 0.5
0.3
43.2
40.5 5.2
2.1 41.6 0.2
35.4 39.3 35.1
28.0
0.1 30.9 4.8
2.4 35.0
23.5 30.4 33.1 6.6 1.7
8.0 23.2
9.6 0.1 26.0 1.8
11.2
0.6 2.2 23.1 5.3
5.5 1.8
1.7
2008 2009 2010 2011 2012 2013 2014 2015 2016
Figure 9 | Composition of later stage, independent undrawn commitments by focus of the fund (Rbn)
General
47.2
Infrastructure 27.1
Other 0.6
41.6 18.3
33.7 1.2
Mezzanine 1.5
2.7
Mining and Resources 3.7
33.8 34.0
15.9 27.4
10.7 1.5
6.8 4.5
25.7 0.4 0.6
12.7 25.5
0.3 22.0
20.1
12.3 21.1 21.0 1.3
12.8
0.4 12.3 14.9 2.2
2.1
0.3 6.0
4.5
8.5 0.1
0.7
2008 2009 2010 2011 2012 2013 2014 2015 2016

Figure 10 | Composition of FUM by BEE level of fund manager 2016
Level 1
Level 2
Level 3
Level 4
Level 5
Level 6
Level 7
Level 8
Not disclosed or non-compliant
6.7%
37.7%
5.7%
8.5%
1.2% 2016
2.2%
0.2%
37.8%
7.6%
41.8%
11.3%
10.0%
1.1%
2015
0.2%
2.0%
26.0%

Comparison to the global market
Although the South African private equity industry as a whole is relatively small in comparison to those of the US and
UK, it is well established and locally significant.
Using EMPEA information, together with survey data for South Africa, South Africa has investment activity as a
percentage of GDP for 2016 of 0.26% (2015: 0.27%).
Figure 11 | Global private equity capital penetration (as a % of GDP)
2016
2015
1.81
UK
2.24
1.70
Israel
0.68
1.54
United States
1.62
0.29
India
0.36
0.26
South Africa
0.27
0.19
South Korea
0.21
0.15
Indonesia
0.04
0.12
SSA*
0.10
0.12
Poland
0.10
0.10
Brazil
0.10
0.09
Nigeria
0.07
0.08
Mexico
0.03
0.07
Japan
0.07
0.07
China
0.11
0.04
MENA**
0.02
0.02
Russia
0.01
0.02
Turkey
0.01
*
Sub-Saharan Africa
**
Middle East and North Africa Source: EMPEA Q1 2017 Industry Statistics for Emerging Markets Private Capital

Fund raising activity
The total of third-party funds raised by the industry in 2016 reached R10.2 billion, a 62.9% decrease from the R27.5 billion
reported for 2015.
Independents account for the majority of reported fund raising activity during 2016, accounting for 90.9% of
funds raised during the year (2015: 99.1%).
By regional source, R7.5 billion (73.5%) of total funds raised in 2016 was from South African sources (2015: 28.4%).
Pension and Endowment Funds were the source of 40.2% of all third-party funds raised during 2016 (2015: 35.3%).
Governments, aid agencies and DFIs accounted for 20.6% in 2016 (2015: 19.6%) and insurance companies/institutions
made up 19.6% of funds raised in 2016 (2015: 8.4%).
Of the cumulative funds not yet returned to investors, South Africa is the main
source of funds raised (43.3%), ahead of the UK (12.1%) and the United States (11.1%).
27.5
26.0
Figure 12 | Third-party funds raised during 2016, analysed by fund stage (Rbn) 1.5
Late stage
Early stage
15.4
15.3
14.5 0.1
14.5 11.8
11.4 11.3
10.6 10.7 11.1
11.2 11.1 10.2
8.5 9.9 0.7
0.2 0.2 3.2
2.1 0.8 7.0
4.9
4.2 3.6 3.6
0.7 3.3 2.2
1.1 1.3 2.2 2.2 0.3 1.4
0.6 1.1 2.2 2.2
0.5 0.2
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Figure 13 | Third-party funds raised during 2016, analysed by 27.5

18.4
fund stage (Rbn)* 7.6
0.5
1.0
Late Stage Pan Africa

Late Stage South Africa
Early Stage Pan Africa
Early Stage South Africa
10.2
0.3
2.9
5.4
1.6
*
Includes funds available for investment in South Africa and Pan Africa.
2016 2015

Figure 14 | Source of third-party funds raised during 2016 (Rbn)
South African Source (R7.5 billion)

Non South African Source (R2.7 billion)
Pension and endowment funds 4.0 0.1 4.1
Government, aid agencies and DFIs 0.4 1.7 2.1
Insurance companies/institutions 1.7 0.3 2.0
Corporates 0.3 0.6 0.9
Banks 0.6 0.6
Private individuals 0.5 0.5
Figure 15 | Source of third-party funds raised during 2015 (Rbn)
South African Source (R7.8 billion)

Non South African Source (19.7 billion)
Pension and endowment funds 3.2 6.5 9.7
Private equity fund of funds 0.2 5.6 5.8
Government, aid agencies and DFIs 1.4 4.0 5.4
Corporates 3.4 3.4
Insurance companies/institutions 2.3 2.30.4
Private individuals 0.5 0.2 0.7
Banks 0.2 0.2

Figure 16 | Geographical sources of third-party funds raised (% of total)
South Africa Rest of Europe Asia

Rest of Africa United States Middle East
UK Canada Other or unspecified
28.4%
4.4%
73.5%
22.2%
2.9%
12.7%
1.0% Funds raised Funds raised
3.5%
8.8% during 2016 during 2015
0.4%
8.9%
3.3%
4.9%
20.4%
4.7%
43.3% 40.1%
3.1% 3.4%
12.1% 19.3%
11.2% Funds raised to 9.0% Funds raised to
31 Dec 2016 not 31 Dec 2015 not
11.1% 9.1%
yet returned to yet returned to
2.6% investors 2.4% investors
2.4% 2.0%
13.4% 11.4%
0.8% 3.3%

Figure 17 | Emerging markets private equity fundraising totals by select markets (US$bn)
South Africa
Russia
India
China
Brazil
32.4
0.7
0.3
2.6
21.6
7.2
26.4
1.1
0.6
7.3 23.1
14.5 1.9
2.9 0.0
3.2
17.8
18.5 0.2
1.1
0.6 16.5
15.9 2.6 0.2
1.5 15.2
11.4 14.2 0.3 0.2
0.1 2.8 2.1
3.2 0.5 0.0
0.6 9.8 4.2
8.6 4.1
2.5 1.2 10.0
10.3 10.3 0.8
0.4 1.6
0.2
2.3
6.9
0.5
2008 2009 2010 2011 2012 2013 2014 2015 2016
The chart above uses EMPEA data for Russia, India, China and Brazil, with South African data collated from the survey.

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Investment activity
The reported cost of private equity investments made during 2016 is R15.5 billion (2015: R12.5 billion).
The total number of investments increased by 34, to 574 during 2016 (2015: 540). These figures include
investments made by Business Partners.
The cost of new investments during 2016 amounted to R10.1 billion (2015: R7.8 billion) and the cost of
follow-on investments during 2016 amounted to R5.4 billion (2015: R4.7 billion).
The overall average investment deal size increased to R27.0 million during 2016, from R23.1 million during
2015. The average deal size for new investments increased to R29.5 million during 2016, from R27.1 million
during 2015, while average deal size for follow-on investments increased to R23.3 million during 2016,
from R18.7 million during 2015.
In terms of the number of reported investments, Business Partners, classified as Captives Other, was
again by far the most active investor in the Southern African private equity market, contributing 350 (61.0%)
of the total number of reported investments made during 2016 (2015: 354; 65.6%). By value, Business Partners
represents 5.4% of the cost of total investments made during 2016 (2015: 6.5%). The average deal size by
Business Partners was R2.4 million in 2016 (2015: R2.3 million).
Excluding the Business Partners investments, the total average deal size of investments during 2016
increased to R65.5 million (2015: R62.9 million), the average deal size of new investments during 2016 decreased
to R95.4 million (2015: R118.5 million) and the average deal size of follow-on investments during 2016
increased to R41.7 million (2015: R35.8 million).
Of the investments made during 2016 and classified into sectors by value, 14.2% were in the real estate
sector, 11.0% in the information technology sector and 11.0% were in the energy and related sector.
Infrastructure comprises 22.6% of the value of all unrealised investments at 31 December 2016, with
manufacturing accounting for 12.9%, and banks, financial institutions and insurance for 7.6%.
The cost of seed and start-up/early-stage investments contributed 15.7% of cumulative unrealised investments
at 31 December 2016 (2015: 15.5%). This is indicative of the proportionally smaller transaction values for
the early-stage types of deals.
Expansion and development, as a proportion of investments made by cost, increased from 43.1% in 2015
to 55.4% in 2016. Replacement capital decreased from 25.5% of investment by cost during 2015 to 11.0%
in 2016.

Investment activity
Figure 18 | Cost of investments made during 2016, analysed by new and follow-on investments (Rbn)*
Follow-on investments 26.1

New investments 1.4
18.9
16.5
15.5
13.9
13.4
12.5
11.8
11.1
8.2
5.4
8.8 5.8 6.2 4.7

6.9 7.2
6.5 5.6 5.0
1.5
4.3 1.8 4.5 2.9
2.4 3.5 0.7 1.3
0.4 1.4
2.0 2.1 3.6 4.7 3.2 5.4 24.7 10.7 4.3 6.2 7.7 6.1 7.6 7.7 7.8 10.1
2001 2002 2003 2004 2005 2006 2007 2008** 2009 2010 2011 2012 2013 2014 2015 2016
Figure 19 | Number of investments made during 2016, analysed by new and follow-on*
Follow-on investments
New investments
834
795 806
730 723
651
627 618
581 235
245 574
547 537 540 540
261
227 510 501
265 150
187
229
178 151
188 174
232
191
222 252
534 422 403 440 503 561 599 458 468 359 363 319 389 279 288 342
2001 2002 2003 2004 2005 2006 2007 2008 **
2009 2010 2011 2012 2013 2014 2015 2016
*
Includes Business Partners
**
For 2008, two investments are excluded owing to a lack of information; these are the acquisition by Denham Capital of shares in SA-based
energy firm, Bio Therm Energy, with a transaction value of R1.5 billion, and the acquisition of a significant shareholding in Medi-Clinic
Corporation by European-based private equity fund, Lehman Brothers Merchant Bank, with a transaction value of R1.3 billion. For the
2011 year the investment by Brait (as an Independent) in Pepkor and Premier Foods for approximately R5 billion is excluded.

Investment activity
Figure 20 | Cost (Rbn) and number of investments made during 2016, analysed by type of fund manager*
Independents
Captives Other
Captives Government
14.6
9.7
11.7 0.3
8.4 0.6
0.1 4.0
0.0
3.2
2015 2016
Cost of investments (Rbn)
224
186 114
87 16
16 11
0 83
83
2015 2016
Number of investments
*
Excludes Business Partners

Investment activity
Figure 21 | Investments made during 2016, analysed by sector (% of total cost)*
2016
2015
14.2
Real Estate
4.0
11.0
IT
1.6
11.0
Energy and related
1.6
10.3
Services
4.8
9.7
Manufacturing
8.8
8.4
Retail
16.0
5.9
Agri and agri processing
4.0
5.8
Infrastructure related services
2.4
5.8
Healthcare
3.2
4.6
General
0.0
4.5
Infrastructure
15.2
3.9
Backs, financial services and insurance
13.6
1.9
Telecommunications
1.6
1.9
Other
17.6
0.6
Travel and leisure
3.2
0.3
Education
0.8
0.1
Mining, natural resources and related
0.8
0.1
Media
0.8
*
Excludes Business Partners

Investment activity
Figure 22 | Unrealised investments portfolio at year end, analysed by sector (% of total)
2016
2015
22.6
Infrastructure
17.6
16.0
Other
27.8
12.9
Manufacturing
9.8
7.6
Banks, financial services and insurance
5.7
7.1
Retail
5.7
7.1
Real Estate
2.5
5.1
Telecommunications
3.8
4.1
Healthcare
2.1
3.9
Services
3.1
3.2
Energy and related
1.8
3.1
Travel and leisure
2.9
2.0
Agri and agri processing
2.0
1.5
IT
0.7
1.5
Infrastructure related services
0.7
1.3
Media
2.2
0.8
Mining and natural resources
11.4
0.2
Education
0.2

Investment activity
Figure 23 | Analysis of investments by stage based on cost of investments (% of total)
Buyout Start up & early-stage

Replacement capital Seed capital
Expansion & development
21.3 22.4 23.9 20.6

11.0 25.5 14.1 14.2
55.4 43.1 46.4 49.7
12.2 8.8 13.9 13.6
0.1 0.2 1.7 1.9
2016 2015 2016 2015

Investments made Unrealised investments
Figure 24 | Analysis of investments by stage based on number of investments (% of total)
Buyout Start up & early-stage

Replacement capital Seed capital
Expansion & development
11.2 9.4 11.0 11.6

9.1 11.5 9.3 11.7
64.1 65.4 66.1 60.4
15.3 12.0 13.1 14.4
0.3 1.7 0.5 1.9
2016 2015 2016 2015

Investments made Unrealised investments

Investment activity
Top Southern African investments made during 2016
Private equity fund Investee company Total Interest Sector focus

enterprise
value (Rm)
Vantage Mezzanine III Vumatel (Pty) Ltd 1 948 Mezzanine Loan Information Technology
Southern African provided + 6.25%
Sub Fund equity participation
Vantage Mezzanine III Worldwide Landmark Holding Company 1 670 Mezzanine Loan Real Estate
Ethos Private Equity Eazi Access Investments (Pty) Ltd 1 600 >50% General
(Pty) Limited
Vantage Mezzanine III New GX Capital Holdings (Pty) Ltd 761 Mezzanine Loan Infrastructure related services
Capitalworks IQ Business (Pty) Ltd 295 >25%, <50% General

Investment Partners
(Pty) Ltd
Sampada Private Equity Euphoria Golf and Life Style 292 >50% Travel and Leisure
Nedbank Private Equity Comsol Networks (Pty) Ltd 244 <25% Telecommunications
Agile Capital Spilltech 200 >50% Services (Cleaning)
Sampada Private Equity Tembisa Megamart 126 >50% Real Estate
Top Southern African investments made during 2015
Private equity fund Investee company Total Interest Sector focus

enterprise
value (Rm)
Metier Private Equity Southey Holdings and Southey Mauritius 2031 >25% Infrastructure related services
Vantage Risk Capital Servest 1670 <50% General
Actis Africa Ltd Coricraft >1 000 <50% Retail
Ethos Private Equity Neopak 863 >50% Paper and packaging
Ethos Private Equity Twinsaver 762 >50% Industrials FMCG
Metier Private Equity Retailability 429 Minority interest Retail
Capitalworks Robertson and Caine 411 >50% Leisure
Kleoss Capital TrenStar SA 305 >50% Mining and related services
Nedbank Private Equity Glocell 227 <25% Information Technology
Metier Private Equity Astrim 189 >50% Health Care
In addition to the deals that were concluded in South Africa, the following fund managers concluded deals outside of
South Africa during 2016: Novare Equity Partners (six investments in the Real Estate sector in Mozambique, Nigeria
and Zambia) and Takura Capital (in the logistics industry in Zimbabwe).

Analysis of BEE investment
BEE participation in investments is fundamental to the South African economy and remains a significant portion of
private equity activity in South Africa.
In 2016, 44.7% (2015: 59.7%) ) of investments made were in businesses with ratings levels 1 to 4 of the DTI BEE codes.
These figures are in line with the general ratings for South African companies.
Figure 25 | Value of investment by BBBEE recognition level (excluding Captives - Government)
Level 1 contributor companies Level 6 contributor companies

Level 4 contributor companies Non-compliant / not disclosed contributor companies
Level 5 contributor companies
7.0% 4.0% 2.6%

25.4% 11.7% 24.2%
2.0% 17.6% 17.2%
10.3% 26.4% 16.2%
10.4% 2016 12.2% 2015 8.9% 2014
3.5% 3.0% 3.1%
4.5% 0.0% 1.7%
1.6% 0.2% 4.1%
35.3% 24.9% 22.0%
Figure 26 | Number of investments by BBBEE recognition level during the year
24.9% 13.4% 7.3%

10.0% 29.6% 26.1%
0.6% 4.6% 15.2%
45.1% 38.0% 12.7%
1.5% 2016 2.9% 2015 4.8% 2014
1.2% 2.5% 3.6%
4.5% 0.2% 2.4%
1.0% 1.3% 2.4%
11.2% 7.5% 25.5%

Exits
Funds returned to investors during 2016 totalled R18.3 billion, compared with R8.2 billion in 2015.3
The returns to investors in 2016 had an implied times money multiple of 2.0 times, compared with the 1.4 times
reported in 2015.
The value of disposals totalled R16.4 billion during 2016, compared with R4.0 billion in 2015.
Disposals in the form of trade sales was the most popular in value terms. By volume, the most popular method of
disposal was sales to management.
The average proceeds per disposal in 2016 was R176.3 million, compared with R48.1 million in 2015.
Twenty one investments were written off during 2016, inclusive of sales for nominal amounts (2015: 19 investments).
The net loss on these investments (cost less proceeds) was R779.3 million in 2016 (R1.4 billion in 2015).
There were no cancelled/expired funds reported during 2015 or 2016.
3
Funds returned represent all cash flows returned to investors including the proceeds of an asset realisation (i.e. an exit), dividends,
interest and repayment of loans. The term disposals refers only to proceeds from the realisation of an investment.

Exits
Figure 27 | Funds returned to investors during 2016 (Rbn)
Pepkor & Premier disposal (R5.2 billion)

Venfin disposal (R8.8 billion)
Vodacom disposal (R16.0 billion)
Funds returned to investors
5.2
8.8
16.0
1.0 1.5 2.4 4.5 4.0 4.4 10.5 6.2 2.0 9.3 20.5 7.0 9.8 11.0 8.2 18.3
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Figure 28 | Nature of funds returned to investors during the year (Rbn)

12.4
During 2016
During 2015
3.6
2.2
1.8
1.2 1.1
0.9 0.7 0.7
0.6 0.4 0.3 0.3
0.1 0.1 0.0 0.0 0.1 0.0 0.0
Trade sale Sale to Repayment Dividends Other/ Share Sale to Sale of Write-offs Listing or
another of preference and unspecified buy-back management listed including IPO
private shares/loans interest by with no shares sales for
equity payments portfolio equity a nominal
form or company involvement account
financial of another
institution financial
institution

Exits
Figure 29 | Analysis of disposals made during the year based on proceeds (Rbn)
Share buy-back by portfolio company

Sale to another private equity firm or financial institution 17.2
0.8
Trade sale 11.3 16.4
1.9 0.3
0.3 3.6
Sales to management (Buy-back) 2.9 12.4
Sales of listed shares and IPOs 0.1
9.1
0.1
4.0
2.9
0.4
1.7
5.6
4.9 4.8 4.8 0.9
1.4 0.5 0.9 3.6
0.3 1.6 3.1 0.8 4.0
3.2 2.7 0.9 0.2 0.2 0.7
3.4 3.1 0.1 1.1
0.1 3.1 0.4 0.2 0.2 0.3
1.6 1.3 0.1 1.6 0.3 1.8
2.0 0.7 1.0 0.6 0.1
0.3 0.3 0.5 1.5
0.6 0.5 0.3
0.2 0.5 0.8 0.8 0.5
0.5 1.0 0.8 0.1 0.3
0.3 0.4
0.7 0.1
0.1
0.1
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Figure 30 | Analysis of number of disposals made during the year based on proceeds*
133 135
2 129 2
18 4 11
16 28 24
78 8 108 90
105 8 106
19 85 1 8
4 4
7 6 11
8 90 93
16 86 87 10 86 4
86 2 5 73 83
62 2 9 7 14
16 7 77 6 4 7
4 12 4 11 20
11 16 13 4 53
80 62 12 51 14
2 44 11 50 2
4 10 9 5 57
5 40 1
6 10
44
3
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
*
Excludes the Vodacom disposal during 2006, the Venfin disposal in 2010 and the Pepkor & Premier disposal in 2011

Exits
Figure 31 | Proceeds and cost of investments exited during 2015 (Rbn)
Proceeds (R4 billion)

Cost (R1.6 billion)
0.1 0.1
4.0 1.6 1.8 0.8 1.1 0.2 0.7 0.3 0.3 0.2
Total Trade sale Sale to another Share buy-back Sale of listed Sales to
private equity by portfolio shares & IPOs management
firm or financial company (Buy-back)
institution
Figure 32 | Proceeds and cost of investments exited during 2016 (Rbn)
Proceeds (R16.4 billion)

Cost (R5.5 billion)
0.3 0.1 0.1 0.1

16.4 5.5 12.4 3.1 3.6 2.2 0.03 0.03
Total Trade sale Sale to another Share buy-back Sale of listed Sales to
private equity by portfolio shares & IPOs management
firm or financial company (Buy-back)
institution

Exits
Top Exits during 2016
Private equity fund Investee Buyer Total enterprise Controlling Sector focus
company value (Rm) stake
Rockwood Private Equity Tsebo Holdings Capital Gap 5 350 >25%, <50% Catering and
Private Markets Facilities management
Ethos Private Equity Idwala Industrial Investec Equity 4 000 >25%, <50% Mining and
(Pty) Limited Holdings Partners Natural Resources
Rockwood Private Equity Safripol Holdings KAP Industrial 4 000 >25%, <50% Manufacturing
Holdings
Evolution I Fund, advised Renewables Old Mutual Life 2 318 <25% Energy
by Inspired Evolution Cookhouse Wind Assurance
Investment Management Farm 1 Pty Ltd
(Pty) Ltd
Ethos Private Equity Universal RMB Corvest, RMB 2 300 >50% Manufacturing
(Pty) Limited Industries Ventures, MIC
Evolution I Fund, advised Kouga Wind Farm Tri-Alpha Fund 2 100 >35%, <50% Energy
by Inspired Evolution Managers and
Investment Management GAIA
(Pty) Ltd
Ethos Private Equity Brandcorp The Bidvest Group 1 900 >50% General
(Pty) Limited and
Sphere Private Equity
Evolution I Fund, advised Slimsun (RF) Tri-Alpha Fund 233 >35%, <50% Energy
by Inspired Evolution Pty Ltd Managers and
Investment Management GAIA
(Pty) Ltd
Top Exits during 2015
Private equity fund Investee Buyer Total enterprise Controlling Sector focus
company value (Rm) stake
Ethos Private Equity TiAuto Old Mutual and 1 776 >50% General
Carlyle Group
Lereko Metier Capital South Point Unemployment 1 578 >50% Student

Growth Fund Insurance Fund, accommodation
managed by the PIC
Ethos Private Equity Plumblink Bidvest 446 >50% General
Ethos Private Equity Transaction Capital Listed on the stock 422 <25% Financial Services
exchange
Vantage Capital Trenstar Kleoss Capital 161 >50% Mining and related
services

Performance
The overriding principle of the International Private Equity and Venture Capital Valuation (IPEV) Guidelines is to
show a fair valuation of investments to the investor. These guidelines were released during 2005 and adopted
by the majority of global private equity associations, including SAVCA. This methodology is used as the basis for
measuring the performance of private equity funds.
Riscura, in conjunction with SAVCA, produce a quarterly South African Private Equity Performance Report. The
latest reported private equity returns over different time periods are as follows:
Figure 33 | Returns over different time periods (ZAR)
Times money
Time Period Pooled IRR Realised Unrealised Total
10 year 15.80% 0.99 0.70 1.69
5 year 14.80% 0.67 0.77 1.44
3 year 16.10% 0.53 0.77 1.30
Figure 34 | Listed equity comparison (ZAR)
Compound annual growth rate (CAGR)
Year Pooled IRR ALSI TRI* FINDI TRI* SWIX TRI*
10 year 15.8% 10.5% 14.4% 11.4%
5 year 14.8% 13.0% 19.9% 14.2%
3 year 16.1% 6.2% 9.0% 7.6%
*
Listed index returns are before fees; private equity returns are net of fees
Reference: RisCura-SAVCA SA Private Equity Performance Report as at 31 December 2016

Performance
Investment at latest valuation
The disclosed valuation of unrealised investments in 2016 was R151.6 billion (2015: R110.2 billion), with a related
cost of R118.1 billion (2015: R89.4 billion).
Figure 35 | Unrealised investments at year end - cost compared to valuation (Rbn)
Cost
Valuation
151.6
138.7
119.8 118.1
110.2
106.5 107.4
101.3
92.1
89.6 89.4
83.9 84.4
78.3
75.7
72.7 73.0
58.5 56.5
39.3
36.4
25.1 25.1
17.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

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Private equity
investment professionals
The total number of investment professionals employed in the Southern African private equity industry totalled 780
in 2016, up from 641 in 2015.
At 31 December 2016, black professionals accounted for 30.3% of the total (2015: 27.1%), coloured professionals 3.8%
(2015: 5.9%), Indian professionals 12.7% (2015: 14.5%) and White professionals 53.2% (2015: 52.4%).
At 31 December 2016, 13.3% of all professionals were female (2015: 12.9%).
Number of professionals 2016
Black Coloured Indian White Total
Male 185 26 89 376 676
Female 51 4 10 39 104
Total 236 30 99 415 780
Number of professionals 2015
Black Coloured Indian White Total
Male 139 33 85 301 558
Female 35 5 8 35 83
Total 174 38 93 336 641

Data tables
Year ended 31 December 2016
Total funds Undrawn Fund raising Investment Proceeds

under commitments activity during activity during from disposals
management at year end the year the year during the year
at year end
R millions R millions R millions R millions R millions
Early-stage funds
Independents 20 577.6 7 350.0 7 039.6 1 593.7 5 497.3
Captives (Financial Services) 0.0 0.0 0.0 0.0 0.0
Captives (Government) 23 727.4 93.0 0.0 330.5 0.0
Captives (Other) 216.6 0.0 0.0 1.7 0.0
44 521.6 7 443.0 7 039.6 1 925.9 5 497.3
Late-stage funds
Independents 87 425.5 47 533.9 2 293.8 6 409.3 9 395.3
Captives (Financial Services) 31 168.4 1 510.0 931.2 4 011.8 2 565.1
Captives (Government) 4 518.4 1 214.2 0.0 299.0 438.8
Captives (Other) 4 205.9 543.9 0.0 1 377.7 303.6
127 318.4 50 802.0 3 225.0 12 097.8 12 702.8
171 840.0 58 245.0 10 264.6 14 023.7 18 200.1
Year ended 31 December 2015
Total funds Undrawn Fund raising Investment Proceeds

under commitments activity during activity during from disposals
management at year end the year the year during the year
at year end
R millions R millions R millions R millions R millions
Early-stage funds
Independents 11 360.1 1 638.8 1 481.0 773.4 9.7
Captives (Financial Services) 0.0 0.0 0.0 0.0 0.0
Captives (Other) 65.3 12.2 0.0 5.0 2.8
30 544.4 1 951.0 1 481.0 778.4 14.5
Late-stage funds
Independents 86 101.4 41 603.2 25 768.1 7 606.2 4 557.0
Captives (Financial Services) 31 194.6 5 168.1 260.0 3 237.3 3 631.2
Captives (Other) 3 189.2 170.0 0.0 886.8 1.0
127 972.0 46 941.3 26 028.1 11 730.3 8 221.6
158 516.4 48 892.3 27 509.1 12 508.7 8 236.1

Participants
KPMG and SAVCA thank all of the participants for their input. Without their time and effort, this survey would not
be possible.
Not all participants are disclosed owing to requests for confidentiality.
Contact
Name Min investment Max investment Contact telephone
4Di Capital (Pty) Ltd R 500 000 R49 million Sam Sperring +27 21 659 2000
Abraaj Group US$ 20 million US$ 500 million Sandeep Khanna +27 11 884 2066
Acorn Private Equity R50 million R500 million Pierre Malan +27 21 852 2887
Actis Africa Ltd US$80 million US$250 million Chantal Clark +27 11 778 5900
African Infrastructure Investment R150 million R800 million Jurie Swart +27 21 670 1234
Managers (South Africa) (Pty) Ltd
Agile Capital R20 million R150 million Tshego Sefolo +27 11 217 3300
Ata Capital R0 R125 million Maredi Mampuru +27 11 321 1636
Awethu Project Capital (Pty) Ltd R2million R50 million Rob LeBlanc +27 11 024 1606
Bopa Moruo R25 million R80 million Boitumelo Tlhabanelo +27 11 784 1740/
1724
Business Partners Limited R500 000 R50 million Gerrie van Biljon +27 11 713 6600
Capitalworks Equity Partners R100 million R500 million Garth Willis +27 11 301 3000
Collins Private Equity R0 R40 million Bruce Chelius +27 31 536 8004
Convergence Partners R5 million No maximum Yolande Tabo +27 11 550 5320
Enablis Financial Corporation SA R 25 000 R5 million Ebenise Bester +27 21 462 4486
Ethos Private Equity (Pty) Ltd Fund VI: Fund VI: Chelsea Wilkinson +27 11 328 7463/
R1.5 billion R3 billion +44 1423 734649
Mid Market Fund I: Mid Market Fund I:

R500 million R1.5 billion
EXEO Capital (Manager of the R65 million R260 million Mariska Vermeulen +27 21 913 5662
Agri-Vie Funds)
Global Capital R20 million R800 million David Vinokur +27 11 728 0255
Growth Capital Partners R5 million R25 million Tim Page +27 11 513 4049
Harith General Partners US$10 million US$ 100 million Pule Molebeledi +27 11 384 4000

Participants
Contact
Horizon Equity Partners R15 million R50 million Richard Flett +27 11502 6940
iCubed Capital R 50000 R5 million Ismail Kajee +27 11888 0027
IJG Capital R8 million R40 million Jakob de Klerk, +264 61 838 517/
Mirko Maier +264 81 227 9994
International Housing Solutions R0 R0 info@ihsinvestments.co.za +27 11 300 8600
Industrial Development Corporation R1 million Subject to Call Centre +27 860 693 888/
(IDC) transaction +27 11 269 3000
Kingson Capital Partners R500000 R50 million Gavin Reardon +27 82 340 8633
Kleoss Capital R50 million R150 million Hale Matsipa +27 11 666 1660
Medu Capital R50 million R200 million Nhlanganiso Mkwanazi +27 11268 9140
Metier Private Equity Metier Capital Metier Capital Paul Botha +27 11268 4000
Growth Fund - Growth Fund -
R50 million R750 million
Metier Sustainable Metier Sustainable

Capital Funds - Capital Funds -
R20 million R100 million
Mezzanine and Credit Partners (Pty) Ltd US$5 million US$30 million Phillip Myburgh +27 11 328 7466
(Trading as Ethos Mezzanine Partners)
Musa Capital R25 million R100 million Richard Akwei +27 11 771 6300
Nedbank Private Equity R50 million R300 million Clive Howell +27 11 294 3321
Nisela Capital R50 million R300 million Richard Ngwenya +27 11268 1839
Nodus Equity Partners (Pty) Ltd R10 million R50 million Hillie Meyer +27 11327 6907
Novare Equity Partners (Pty) Ltd Novare Africa Novare Africa Derrick Roper +27 21 914 3944
Property Fund I - Property Fund I -
R69million R274 million
Novare Africa Novare Africa

Property Fund II - Property Fund II -
R69million R822 million
Old Mutual Alternative Investments R75 million R2 billion Paul Boynton +27 21 509 6869
Pembani Remgro Infrastructure R0 R0 Marcel Louw +27 11290 0231

Managers (Pty) Ltd
Phatisa Group R100 million R400 million Stuart Bradley +27 11463 1920
RH Managers R50 million R200 million Quinton Zunga +27 10007 2171
RMB Corvest R30 million R500 million Neil Page +27 11 380 8300

Participants
Contact
RMB Ventures R50 million R1 billion Nielen van de Vyver "+27 11 282 4220
+27 11 282 1815
Rockwood Private Equity R250 million R1 billion Susan Rose +27 10 060 4153/45
Sampada Private Equity (Pty) Ltd R10 million R80million Nokuthula Mthombothi +27 11318 0171
Sanari Capital R10 million R150 million Samantha Pokroy +27 76 456 3339
Senatla Capital R40 million R120 million Owen Maubane +27 11 784 5929
Sphere Private Equity (Pty) Ltd R50 million R150 million Marang Denalane +27 10900 4200
(Closed for new investments) (on balance sheet, (on balance sheet,
Fund closed for new Fund closed for new
investments) investments)
Takura Capital US$4 million US$7 million Portia Chitanda +263 4 707 313/
+263 4 794 940
Trinitas Private Equity R40 million R150 million Andrew Hall +27 11994 9700

Sources of information
The principal source of information for this survey was the survey questionnaire. Further sources include the SAVCA
2016 Members Directory, discussions with private equity industry participants, and public information on private
equity funds that include international surveys.
The survey questionnaire was developed by SAVCA and KPMG.
The guidelines for participation in this survey are as follows:
Participants must:
Include investments if they are made in South Africa, regardless from where they are managed;
Have as their principal business the management of funds (third-party and/or proprietary capital) for the provision
of capital (equity or quasi equity) primarily to unlisted companies;
Employ professionals dedicated to the management of the capital and the investments made using the capital
(and capital from other providers); and
Aim to generate returns mainly through medium to long-term returns on the sale of investments and/or social
development returns.
Questionnaires were e-mailed to 110 (2015:110) funds that indicated that they would consider participating in the
survey. Of these, 61 (2015: 57), representing 96 funds (2015: 84), completed the questionnaire. In addition, alternative
sources were used to obtain information on a further 4 private equity firms, representing 4 funds, that did not complete
the questionnaire.
Comparative data for 2015 may have been restated by participants for errors or omissions. In addition, 2015 data
may have been restated for the inclusion/exclusion of funds that did or did not participate in the 2016 survey.
Other empirical data have been obtained from various sources, including:
EMPEA Industry Statistics Q1 2017 Industry Statistics for Emerging Markets Private Capital
RisCura-SAVCA South African Private Equity Performance Report Quarter ended: 31 December 2016
Statistics South Africa
Other sources specifically included in the footnotes.
SAVCA reviews the document prior to its public release. SAVCA does not have access to any of the individually
completed questionnaires submitted to KPMG or any other information not presented in this publication.
While care has been taken in the compilation of the survey results, SAVCA and KPMG do not guarantee the reliability
of its sources nor of the results presented. Any liability is disclaimed, including incidental or consequential damage
arising from errors or omissions in this report.

Glossary
BEE Black Economic Empowerment
BEE, as defined in the Financial Sector Charter, means the economic empowerment of
all black people, including women, workers, youth, people with disabilities and people
living in rural areas, through diverse but integrated socio-economic strategies.
Buy-out Leveraged and/or management buy-out or buy-in.
Captive funds Funds making investments mainly on behalf of a parent or group, typically an insurance
company, bank or institutional asset manager, often from an indeterminate pool of
money.
Carried interest This represents a fee enhancement for a private equity fund manager, for achieving
above a benchmark return or hurdle rate. The fee is often set at 20% of the value of
returns achieved in excess of the benchmark return.
Development capital Funding for growth and expansion of a company.
DFIs Developmental Finance Institutions.
Early stage funds Funds focused on seed capital, start-up and early-stage investments.
EMPEA Emerging Markets Private Equity Association.
Follow-on Investments into companies where at least one round of funding has already been
investments made.
FUM Funds under management.
GDP Gross Domestic Product.
Independent fund Those private equity companies, managers or funds raising and disbursing capital
which has been sourced mainly from third party investors.
IPO Initial public offering: when a companys equity is offered and listed on a formal stock
exchange.
IRR Internal Rate of Return.
Late stage funds Funds focused on buyout, replacement capital and growth capital.
Mezzanine debt Debt which ranks behind senior secured debt but ahead of trade credit and shareholders
funds in terms of security. Mezzanine debt is often used in higher leveraged transactions
to maximise funding availability from a companys own balance sheet. It may provide
for equity-like features such as attached share purchase warrants or participation in
cash-flow.

Glossary
Pooled IRR The pooled internal rate of return (IRR) aggregates or pools all cash flows and
end-period net asset values to calculate a money-weighted return.
Replacement capital Funding for the purchase of existing shares in a company from other shareholders,
whether individuals, other venture-backers or the public through the stock market.
Unlike venture and development capital, the proceeds of replacement capital
transactions are generally paid to the previous owners of the entity.
SAVCA The Southern African Venture Capital and Private Equity Association.
Seed capital Funding for research, evaluation and development of a concept or business
before the business starts trading.
Start-up and early-stage Funding for new companies being set up or for the development of those which
funding have been in business for a short time.
Total funding Total funds raised by all providers of capital during a transaction. This could
include the purchase consideration, funds to pay advisors fees, or funds required
for immediate working capital requirements. This could be in the form of equity,
shareholder loans, senior, mezzanine and junior debt and working capital facilities.
Trade sale Sale of a business to an industry third party.
UK United Kingdom.
Undrawn commitment Capital committed to a private equity fund, but not yet drawn down for investment
purposes.
US United States of America.
Venture capital Seed capital or capital for start-up and early stage.

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Old Mutual Alternative Investments (Pty) Ltd is a licensed financial services provider, FSP No 45255, approved by the Registrar of Financial Services Providers (www.fsb.co.za) to provide advisory and/
or intermediary services in terms of the Financial Advisory and Intermediary Services Act 37, 2002. Old Mutual Alternative Investments (Pty) Ltd is a wholly owned subsidiary of Old Mutual Investment
Group Holdings (Pty) Limited and is a member of the Old Mutual Investment Group. Contractual rights and obligations of investors are set out in the relevant investor agreements and or mandates.
Unlisted investments have short term to long term liquidity risks and there are no guarantees on the investment capital nor on performance.Market fluctuations and changes in exchange rates as well
as taxation may have an effect on the value, price, or income of investments and capital contributions. Since financial markets fluctuate, an investor may not recover the full amount invested. Past
performance is not necessarily a guide to future investment performance.
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THE NEXT GENERATION IN

PRIVATE EQUITY INVESTING
AN AUTHORISED FINANCIAL
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SA private equity industry sees growth in FUM and returns

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SAVCA 2017

Private Equity Industry Survey

SAVCA Venture Capital and Private Equity Industry Performance

FROM POWERFUL PARTNERSHIPS COME POWERFUL SOLUTIONS

At CDH we believe that consistency, an understanding of our clients and

Funds under management 8

Fund raising activity 18

Analysis of BEE investment 32

Private equity investment professionals 44

SAVCA 2017 Private Equity Industry Survey | 1

Tanya van Lill

2 | SAVCA 2017 Private Equity Industry Survey

2122 February 2018

www.savca.co.za | +27 (0) 11 268 0041 | info@savca.co.za | @savca_news

SAVCA 2017 Private Equity Industry Survey | 5

Third-party funds raised during 2016, analysed by fund stage (Rbn)

6 | SAVCA 2017 Private Equity Industry Survey

Pepkor & Premier disposal (R5.2 billion)

Follow-on investments 26.1

New investments 1.4

8.8 5.8 6.2 4.7

SAVCA 2017 Private Equity Industry Survey | 7

SAVCA 2017 Private Equity Industry Survey | 9

10 | SAVCA 2017 Private Equity Industry Survey

SAVCA 2017 Private Equity Industry Survey | 11

Agri and Agri processing

12 | SAVCA 2017 Private Equity Industry Survey

86.3 30.6 39.3

Undrawn commitments (R58.2 bn) Undrawn commitments (R48.9 bn)

SAVCA 2017 Private Equity Industry Survey | 13

Undrawn commitments Pan Africa + Rest of Africa + Outside Africa

Figure 7 | Classication of undrawn commitments by stage of investments (Rbn)

35.0 35.9 34.9

14 | SAVCA 2017 Private Equity Industry Survey

2008 2009 2010 2011 2012 2013 2014 2015 2016

2008 2009 2010 2011 2012 2013 2014 2015 2016

SAVCA 2017 Private Equity Industry Survey | 15

16 | SAVCA 2017 Private Equity Industry Survey

Figure 11 | Global private equity capital penetration (as a % of GDP)

SAVCA 2017 Private Equity Industry Survey | 17

Figure 13 | Third-party funds raised during 2016, analysed by 27.5

Late Stage Pan Africa

SAVCA 2017 Private Equity Industry Survey | 19

South African Source (R7.5 billion)

Pension and endowment funds 4.0 0.1 4.1

Government, aid agencies and DFIs 0.4 1.7 2.1

Insurance companies/institutions 1.7 0.3 2.0

Corporates 0.3 0.6 0.9

Banks 0.6 0.6

Private individuals 0.5 0.5

Figure 15 | Source of third-party funds raised during 2015 (Rbn)

South African Source (R7.8 billion)

Pension and endowment funds 3.2 6.5 9.7

Private equity fund of funds 0.2 5.6 5.8

Government, aid agencies and DFIs 1.4 4.0 5.4

Corporates 3.4 3.4

Insurance companies/institutions 2.3 2.30.4

Private individuals 0.5 0.2 0.7

Banks 0.2 0.2

20 | SAVCA 2017 Private Equity Industry Survey

South Africa Rest of Europe Asia

SAVCA 2017 Private Equity Industry Survey | 21

2008 2009 2010 2011 2012 2013 2014 2015 2016