Economy / 7 October 2019, 3:30pm / Philippa Larkin
JOHANNESBURG - To boost transformation in South Africa’s private equity industry the Southern African Private Equity and Venture Capital Association (Savca), in partnership with First National Bank and the SA SME Fund as lead sponsors, last week launched a Fund Manager Development Programme (FMDP) to hike the number of female and black-owned and managed funds.
Tanya van Lill, chief executive of Savca, explained that at Savca’s Annual Conference in 2018 its members and delegates from the conference indicated that barriers to transformation in the sector were:
Insufficient access to and focus on attracting, educating and incubating opportunities for new entrants to grow the pool of fund managers.
Lack of people with the necessary track record limits access to capital.
Lack of understanding and appreciation of a more diverse workforce.
According to the 2019 Savca industry survey, the percentage of female and black professionals within the industry in 2018 increased to 29.6 percent and 56.9 percent, respectively, up from 21.8percent and 50.9percent in 2017.
Savca represents about R165billion in assets under management through 170 members that form part of the private equity and venture capital ecosystem. “Savca, as an industry body, is excited to see the positive trend of female and black professionals within the private equity industry and would like to see this trend extend to fund manager executive and ownership level,” Van Lill said.
Speaking at the programme’s official launch event, which took place last week, the FMDP programme manager, Melanie de Nysschen, said that from the 50-plus applications received, 13 fund managers had been selected to participate.
“The calibre of the applications we received for the inaugural FMDP was extremely high.”
The 13 selected comprised seven generalist private equity funds, four infrastructure funds, and two venture capital funds.
De Nysschen noted that an even split was obtained between aspirant and growth fund manager participants.
“The programme caters to both aspirant fund managers - first time managers who have an investment thesis but are still in the process of setting up their fund - and growth fund managers who have already set up their fund, have investments under management, and are in the process of raising further capital and scaling their businesses. Given that the programme will cater to fund managers that are in different stages of development or growth, there will be customisation of the programme to target relevant areas of development and support for the selected fund managers.
“The intention is not to flood the market with hundreds of new private equity and venture capital firms, but rather to assist the selected high-potential emerging fund managers,” she said. Through classroom-based teaching, one-on-one coaching, mentoring and support from industry stakeholders, the 12-month programme aims to address some of the challenges experienced by first-time emerging fund managers such as fundraising, access to networks and working capital facilities, and most importantly ensuring the fund team has the necessary support to successfully execute on their fund’s investment mandate.
To ensure the practical relevance of the programme, Van Lill said the final quarter was expected to culminate in capital raising presentations to both local and international investors.
Van Lill hopes to see a substantial increase in the value of assets under management by black and female-owned and managed funds from the programme.