“We’re seeing no exposure to international private equity [among South African LPs], so the gap in the market is apparent.”
Looking to fill that gap is Craig Beney, co-chief executive of Johannesburg-based Helical Capital Partners. The firm aims to provide South African institutional investors with access to global private equity markets through Partners Group funds. The country’s pension funds can invest up to 10 percent of their assets in private equity, after legislation in 2011 raised the previous limit of 2.5 percent.
A former chief operating officer at African impact firm Convergence Partners, Beney left in January to launch Helical with Carlos Ferreira, formerly chief executive of Fairstone Capital. Helical will distribute global Partners Group funds to pension funds, wealth managers and family offices in South Africa, as well as LPs from other sub-Saharan nations.
The firm will target around $300 million for the Global Value Fund 2018 SA, which Partners Group will manage and invest alongside the Zug-based firm’s own global value funds, Beney told Private Equity International. The vehicle will offer African LPs access to primary fund commitments, direct investments and secondaries deals across North America, Europe and Asia.
“We are looking at some of the pension funds in South Africa who may have $5 million or $10 million to invest but maybe not the $50 million that Partners Group will normally accept directly into their fund,” Beney said. Partners Group is understood to have a small existing client base in South Africa.
“Ultimately we’re going to be playing an element of aggregation but also educating the South African investor in terms of private equity.”
“If we can raise around about $1 billion of commercial money for that fund at that point in time, that would be our vision we’d love to aim for.”
Helical will also assess appetite for Partners Group funds across other asset classes such as private real estate, private infrastructure and private debt.
The firm – which will retain advisory board oversight for the vehicle – is part-owned by Convergence Partners and the two co-chiefs, Beney added. Partners Group provided financial assistance for the launch but does not have an equity stake in the business.
Helical is also planning to explore the launch of an impact fund manager for the sub-Saharan region in 2022, Beney noted. The vehicle would seek capital from foreign commercial investors.
“We would love to see a growth fund for South Africa to look at job creation,” he said.
“Private equity has probably thrown off the reputation of being somewhat asset stripping, job cutting, leveraging etc, and we’ve seen a big move from most players in the market to sustainability investment. If we can raise around about $1 billion of commercial money for that fund at that point in time, that would be our vision we’d love to aim for.”