Ethos Private Equity, one of the largest sub-Saharan fund managers, is looking to raise R2 billion (about $139 million) by listing Ethos Capital, a special vehicle set up to offer a broader universe of investors access to the private equity asset class, on the Johannesburg Stock Exchange. The IPO, which is expected on August 5th, has reportedly already garnered R1.1 billion in commitments from a number of blue-chip investors including New York private equity firm Black Hawk, Coronation Fund Managers, Kagiso Asset Management, Stanlib as well as Ethos Private Equity itself.
The book build began on Monday last week and will be open for two weeks. The offer provides institutional investors and high net worth individuals an opportunity to make long term commitments to private equity balanced by the flexibility to increase or exit their investments when they please.
Ethos Capital will act as a seed fund for the other funds managed by Ethos Private Equity, making primary investments in new funds, acquiring the interests of current Limited Partners in existing funds as well as making co-investments alongside the funds. Among the commitments the Mauritius-registered vehicle will make to new funds being launched by its parent are Ethos Fund VII, a buyout fund which will start raising later this year or early next year with a target of approximately $700 million, Ethos Mid Market Fund I, a $175 million fund which will target companies with at least a 25% black ownership threshold and Ethos Mezzanine Fund I, a closed-end fund providing mezzanine and quasi-equity financing solutions to companies in southern Africa.
Commenting on the listing, Stuart MacKenzie, Ethos Private Equity’s CEO said “It is important to appreciate that we are not seeking to change our business model but rather to broaden both the opportunity set we can invest in; and the universe of investors that can access the funds we manage. We will continue to raise capital from our existing investor base who will invest in our Funds alongside Ethos Capital.”
Rand Merchant Bank is acting as financial advisor, sole global coordinator, bookrunner and JSE sponsor in relation to the Ethos Capital listing.