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Ethos Mid Market Fund I hits first close at over $47m

Anna Lyudvig
Nov. 23, 2016, midnight
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Word count: 340

The Ethos Mid Market Fund I, a black-managed, mid-market focused fund in South Africa, has raised R675m ($47.39m) at first close, Africa Global Funds can reveal.

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The Ethos Mid Market Fund I, a black-managed, mid-market focused fund in South Africa, has raised R675m ($47.39m) at first close, Africa Global Funds can reveal.

Sonja De Bruyn Sebotsa, Partner at Ethos Private Equity, told Africa Global Funds that the Fund is targeting R2-2.5bn at final close, which is expected at the end of the first quarter – beginning of the second quarter 2017.

Investors in the Fund are South African institutional investors, and Ethos Capital is one of the first close investors with a commitment of R550m and with an intended total commitment on final close of R900m.

Ethos Mid Market Fund I will invest in leverage buyout transactions with enterprise values of between R500m to R1.bn, where it will deploy R100-350m in equity.

The Fund will seek to be the lead shareholder or have significant influence in all its investments.

According to de Bruyn Sebotsa, the Fund has a mandate to invest into Sub-Saharan Africa.

“Ethos Mid Market Fund I is a generalist fund; we are currently assessing exciting opportunities in healthcare, education and business services,” she said.

“We are actively looking at family-owned and/or entrepreneurial businesses, corporate spin-offs, and optimisation opportunities where we can accelerate growth,” she added.

The Ethos Mid Market Fund I has recently received the requisite approvals for the acquisition of certain BEE assets from Ethos Fund VI and completion is expected to occur by mid-December 2016.  

The assets acquired include a 15% stake in Autozone and Twinsaver and a 10% stake in Eazi Access, for a total upfront consideration by the Fund of R361m.

“Ethos Mid Market is about to close its first three investments. These are likely to close before the end of December 2016,” de Bruyn Sebotsa said.

The Mid Market Fund will follow Ethos’ proven investment discipline and leverage the Group’s proprietary networks, differentiated value add offering and extensive reach.

“Combination of strong private equity execution skills and significant empowerment credentials gives us a distinct competitive advantage,” de Bruyn Sebotsa said.

 

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