Ethos Private Equity, a division of JSE-listed Ethos Capital, has been appointed the investment adviser for two of Ninety One’s African private equity funds in a move that will increase Ethos’s push into the continent.
“It’s an exciting move designed to broaden our horizons and diversify our base, and it complements our existing activities on the continent where we want to achieve substantial scale,” said Ethos Private Equity partner Jono Matthews.
Ninety One will maintain control and oversight of the portfolios while Ethos takes over the daily management of funds 1 and 2, effective immediately. Fund 1, which holds two assets, is nearer to the end of its life cycle, while Fund 2 (five assets) is said to be more middle-stage.
Three Ninety One staff members will join Ethos as part of the agreement.
“The decision to engage an adviser for our Africa Private Equity funds is in line with our commitment to simplifying our business while pursuing better outcomes for our limited partners,” said Ninety One chief commercial officer John Green.
While Ethos has been given a mandate to optimise and realise the sale of assets in the portfolios, the deal will familiarise the firm with the diverse industry dynamics of companies in the portfolio.
It will also position Ethos to raise capital from existing investors in the funds with which the firm has no pre-existing relationship.
Ethos embarked on a pan-African strategy five years ago in which the firm opened an office in Nairobi and launched the $123m Mezzanine fund focused on Eastern and Southern Africa.
The deal reflects a similar mandate to that which Ethos Private Equity won last year when the company was appointed investment adviser to listed investment holding company Brait.
Matthews says this phenomenon of appointing investment managers to oversee the selling of assets appears to be a trend, and Ethos Private Equity intends to evaluate such transactions.
“There has been a lot of disruption in private equity on the continent. We think there will be many more opportunities in which assets need to be optimised and ultimately realised. But we are quite selective about what we get involved in,” said Matthews.
Ethos Private Equity partner Aliya Shariff, who, with Matthews, will support the portfolio, said that despite the pandemic there are still opportunities to grow.
“Ethos continues to see the African continent as an area for growth — through new investments, as well as expansion opportunities for Ethos portfolio companies. It’s a time of significant change for the private equity sector in Africa and we expect to see further opportunities like this,” said Shariff.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.