The Rohatyn Group (TRG), a specialised global asset management firm focused on investments in emerging markets and real assets, has agreed to acquire Ethos Private Equity for an undisclosed amount.
The New York-headquartered TRG — whose investment teams have capabilities across public equities, corporate and sovereign debt, private markets, forestry, agriculture and infrastructure — will effectively incorporate Ethos into its operations as its African arm to give its investors access to one of the world’s fastest-growing regions. Since its establishment in 1984, Ethos has made more than 150 investments in businesses across SA and Sub-Saharan Africa.
“The philosophical and cultural similarities of TRG and Ethos were apparent from the start,” said Nicolas Rohatyn, TRG’s CEO and founder.
“We share a belief that multiple thematic cross-currents — such as private credit, renewable energy, digitalisation, and agriculture — will anchor future investment priorities for investors. This transaction is a strong vote of confidence in the Ethos team and signals our intention to leverage its platform to drive growth and investment in SA and across the continent.”
TRG, which has about $6bn in assets under management (AUM), was founded in 2002 and now employs more than 120 professionals based in 16 cities across the US, Latin America, Europe, the Middle East, India, Southeast Asia and Oceania. After combining with Ethos, TRG’s AUM will swell to almost $8bn, which will include a portfolio of investments that include stakes in TymeBank, AutoZone, Primedia, RTT and Twinsaver.
While the value of the transaction was not disclosed, Ethos private equity has $1.7bn (R29.5bn) in assets under management.
Ethos CEO Stuart MacKenzie said the partnership with TRG marks the culmination of a strategic transformation Ethos commenced in 2016 that included diversifying its product offering, geographic footprint and sources of capital.
“For us is a perfect window of opportunity to join up with a much bigger firm and we think there will be significant benefits of scale for us and for them across our value chain,” said MacKenzie. “It’s good news for the continent, it’s good news for SA and it’s good news for us as a manager.”
Lazard was an adviser to TRG during the transaction, which remains subject to approval by SA competition and exchange-control authorities. Once approved, Ethos will rebrand under the TRG banner.
“We will be a Pan African arm of TRG’s Africa strategy,” MacKenzies said.
He said the combined firm planned to raise new private equity capital to help facilitate organic growth on the continent, and might also start a new Pan African credit fund. Ethos already has several mezzanine and credit funds focused on East and Southern Africa.
As TRG’s Pan African arm, the combined entity will also look to obtain advisory contracts for existing private equity funds on the continent, much like it has with Brait and Ninety One.
Ethos secured an advisory contract for Ninety One’s Africa private equity funds in late 2020, giving it exposure to an asset base with a footprint extending to Morocco and Egypt.
In 2019, Brait appointed Ethos to manage its portfolio of assets that include Virgin Active, UK fashion retailer New Look and soon-to-be-listed Premier Group.
“We continue to see an opportunity in [fund] consolidation and restructuring across the continent,” said MacKenzie. “Like we did with Brait, like we did with the Ninety One private equity Africa funds ... we see an ongoing opportunity to do that as part of our growth.”
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