The 2014 KPMG and SAVCA Venture Capital and Private Equity Industry Performance Survey is the fourteenth consecutive collaboration between KPMG and SAVCA. Recognised as one of the most detailed of its type globally, it gives private equity stakeholders a greater understanding of this unique industry and its trends.
This latest survey, which covers the 2013 calendar year, reflects an expanded industry with R162.2 billion in funds under management as at 31 December, a 17% increase from the start of that year. The lift in funds under management in the South African market reflects both the outcome of successful fundraising programmes during the course of 2013. Since this survey was first published, the compound annual growth rate of funds under management over a fourteen-year period has been 11.8% (excluding undrawn commitments).
A significant portion of private equity funds are sourced from outside of South Africa, with these third-party funds coming from geographies such as the Middle East, North America, Europe and the UK, Their long term commitments, usually of around ten years, contribute towards much-needed foreign direct investment in South Africa and the rest of Africa.
With South Africa’s ongoing focus on Black Economic Empowerment, the survey highlights the notable role of private equity in this regard. Private equity models help to facilitate BEE shareholdings and most transactions today inevitably have a BEE component to their structuring.
2013 saw nearly half of 2013 investments being channelled into infrastructure. This continuing theme shows the ongoing developmental opportunities available in energy, transport, telecommunications and social infrastructure, both in South Africa and into the continent. Infrastructural investment can be rewarding for fund managers and investors. It delivers pleasing returns and meets mandates that prioritise sustainability, while at the same time playing a key role in the development of Africa.
The KPMG/SAVCA survey methodology is through questionnaires, supplemented by other information sources such as discussions and international reports. We consider the survey to represent in excess of 90% of the South African Private Equity industry by funds under management.