JOHANNESBURG: Investemnt firm Pamodzi Investment Holdings has launched Africa’s biggest private equity fund, the $1,3bn Pamodzi Resources Fund (PRF), CEO Ndaba Ntsele said on Friday.
Ntsele said the fund was supported by a consortium of US investors including affiliates of American Metals & Coal International (AMCI) – a leading international energy and resources sector investor.
"International support for the fund is an overwhelming vote of confidence in the future of SA and sub-Saharan Africa. It is also further evidence of our proven ability to attract long-term foreign direct investments to SA," said Ntsele .
The PRF fund will focus on high-return investment opportunities in the resource and resource-related sectors, primarily in South Africa and across sub-Saharan Africa.
"The PRF enables us to diversify our investments into resource opportunities in sub-Saharan Africa that offer the highest sustainable returns. This complements our traditional private equity business and provides us with a diversified, risk-acceptable yet lucrative investment footprint," Ntsele said.
"It also substantially increases our participation in the resource opportunities in sub-Saharan Africa that offer the highest sustainable returns. "
Pamodzi has raised more than R16bn in investment funding over the past 10 years. The funds have been invested in a diverse portfolio of leading companies with attractive growth potential.
About R12bn of this had come from offshore, Ntsele said. Pamodzi is a major player in the resources sector and holds a controlling stake in Pamodzi Gold, which has a market capital of R1bn.
The company leads black investors who will soon hold a 27% stake in Anglo Inyosi Coal, a R7,4bn coal mining venture with resources of about 4-billion ton s.
Ntsele said Pamodzi had assembled a highly qualified team of resources fund managers to manage the fund.
He said he was bullish about the fund’s upstream and downstream effect on SA’s economy. "Independent research indicates such investments into local companies hold huge benefits for the country. Apart from the cash effect to develop major businesses, they also have a multiplier effect on secondary industries," he said.
The fund has substantially raised the previous benchmark set by South African-led private equity funds and its entire funding came from foreign investment.
Ntsele said Pamodzi had already submitted an application to the central bank to approve the fund.
Previously, Africa’s biggest private equity fund was Brait (SA’s $880m Brait Fund IV).
Private equity activity in SA has risen sharply in the past couple of years although private equity takeovers have mainly been in the retail sector.
The country’s largest fashion retailer, Edcon, was bought out by US firm Bain Capital for $3,5bn, SA’s biggest private equity deal yet.
PRF would substantially raise the previous benchmark set by South African-led private equity funds.
Regis Nyamakanga of Business Day contributed to this report.