INVESTING in private equity — which offers returns much higher than those of conventional investments — will no longer remain the preserve of institutional and wealthy investors, after Ethos Private Equity on Monday announced its intention to list Ethos Capital Partners.
Ethos Capital said it would issue up to 200-million shares at R10 each to qualifying institutional investors to raise up to R2bn. It already has R1.1bn in commitments from Ethos and other investors, such as asset manager Coronation.
Ethos Capital CEO Peter Hayward-Butt said the company and Ethos Private Equity were two different entities, and Ethos CEO Stuart McKenzie and his team would continue to run the private equity company — which invests in, and scales up, unlisted companies — as usual.
“This separate vehicle will allow investors to participate in the underlying funds,” he said. Ethos had decided to list Ethos Capital after being approached by institutional investors who were happy with their funds’ performances, which consistently delivered an internal rate of return of 27% — outperforming the market — but were not happy to stay invested for 10 years.
“We mostly target institutions because it is a large stake over a long period of time, and it is illiquid,” said McKenzie.
Hayward-Butt said Ethos Capital would tackle the liquidity problem, with shareholders allowed to buy any number of shares and sell any time they wanted.
Ethos Capital was expected to list on August 5.