17 Jul 2016

Sunday Times
17 JUL 2016

Ethos Private Equity will list Ethos Capital on the JSE next month with the aim of raising R2-billion from the initial public offering.

Ethos Capital CEO, Peter Hayward-Butt said on Friday: We’re looking to raise R1.5-billion from investors, one of which is Ethos Private Equity, he said.

The company has commitments of about R1.08-billion from investors, one of which is Ethos Private Equity, he said.

Ethos Capital and Ethos Private Equity will be run as separate companies, with Ethos Capital channelling funds to the three investment funds managed by Ethos Private Equity.

The proceeds from the listing will go towards funding the new Ethos Fund VII, Ethos Mid Market and Ethos Mezzanine funds.

Ethos Fund VII is a primary fund for with Ethos Private Equity will begin raising funds later this year or early in 2017.  The fund size target is expected to be between R8-billion and R10-billion.

The earmarked companies will be valued at between R1.5-billioon and R7-billion and Ethos Fund VII will invest R450-million to R1-billion in each entity.

Ethos Mid Market Fund, which is 51% black owned, is targeting R2.5-billion to be invested in companies with a 25% direct black shareholding.  The fund will be headed by Sonja De Bruyn Sebotsa, a founder of Identity Partners- a black women-owned private equity business.  The remaining 49% stake of the Ethos Mid Market Fund is owned by Ethos Private Equity.

Ethos Mezzanine Fund will invest in companies that have a competitive advantage in a particular sector, a proven track record of free cash flow in order to serve debt and experience management, said Hayward-Butt.

Ethos Capital hopes the listing will attract high net-worth investors who require a more liquid investment vehicle than a private equity fund, said Ethos Private Equity CEO Stuart MacKenzie.

The book build begins tomorrow and will be open for two weeks.  Ethos Capital, which will operate from Mauritius, will list as an investment entity under financial services (speciality finance) on August 5.