13 Jan Khumovest Private Equity Fund I
Khumovest is proud to announce the launch of the Khumovest Private Equity Fund I, which is a Private Equity Fund that is focussed on making equity capital investments into small and mid-cap companies operating within South Africa.
Khumovest was established in 2015 by Mr. Ratirelo Mothobi, CA(SA) and Mr. Thurstan Moodley, CFA and is a 100% black owned and managed financial services firm and a Level I contributor to Broad Based Black Economic Empowerment. Ratirelo and Thurstan each have in excess of 10 years of experience within the unlisted investment space, having previously managed private equity and private debt transactions.
The thesis of the Khumovest Private Equity Fund I is to provide equity capital to small and mid-cap companies that are in need of capital and strategic guidance to grow their businesses, thereby assisting our country in growing its economic base and reducing our stubbornly high unemployment rate. Within South Africa, like other economies across the world, small to medium sized companies are the engines that drive economic growth, employment, and inclusivity:
Source: McKinsey & Company, July 2020
Given the importance of small to medium sized enterprises, the support of this segment of the market is vital to the economic success of our country. Ratirelo Mothobi (Managing Partner) noted: “Over the past few years, we’ve taken note of the difficulty that the owners of small to medium sized businesses have of raising investor capital, as capital continues to flow predominantly to large corporates. We intend to change this narrative, by supporting established small and medium sized companies, to allow these companies, to one day stand confidently among the giants of industry.”
Thurstan Moodley (Managing Partner) added: “In addition to providing risk capital, Khumovest is also a hands-on investor, as we assist portfolio companies with strategy formulation, business development, governance and transformation initiatives. We work alongside management and shareholder teams to take good South African businesses and make them world class.”
Khumovest made its first investment into the small and mid-cap segment during 2018, when Khumovest invested into a business that distributed hand and surface sanitizers to both retail and business clients. The Company required growth capital, to allow it to bring the manufacturing of its products in-house in order to service its client base more efficiently, as well as strategic guidance to further penetrate the market. Khumovest invested fresh equity capital into the business, which the business utilized to procure a production plant, as well as employ new staff to manage the now in-house production process. Khumovest further assisted the company to improve its governance process, by establishing a formalized board of directors, as well as assisting the company with the outsourcing of its financial and human resources function, which has allowed the management team to remain focused on driving sales and improving efficiencies. The Company is now a listed supplier to major retailers, as well as large business-to-business clients, within the healthcare and industrial sectors.
A key feature of the Fund is to invest alongside strong owner managed teams, that are aligned and incentivized to create long term real value in the businesses they own and manage. Importantly, the Fund is not a buyout fund and the Fund’s mandate is to focus on organic and sustainable earnings growth, rather than financial engineering that are akin to leveraged buyout transactions.
To date, Khumovest has successfully secured a R125 million commitment from the 27four Black Business Growth Fund and is currently seeking additional investor capital to reach the Fund’s target close of R500 million. Priyan Padayichie (Associate Partner) highlighted: “We are honoured and humbled to have secured a commitment from the 27four Black Business Growth Fund and believe that this funding commitment is a testament to our strategy and product offering, which is greatly needed in the South African market. We are now actively searching for potential investors to invest alongside the 27four Black Business Growth Fund to support our disruptive initiative.”
Our Fund is sector agnostic but has a skew towards to the following industries: manufacturing, financial services, technology, industrials, agro-processing, fast-moving consumer goods and healthcare. To the owners of the small and medium businesses we seek to uplift, we encourage you to contact us for more information. Together we have the power to elevate the South Africa economy, and if we have this power, then it is our responsibility to do so for the betterment of all South Africans.
Khumovest is an authorised financial services provider (FSP: 46637) and registered credit provider (NCRCP10355).