Private equity

The Ashburton Investments private equity funds aim to achieve long-term capital gains through a diversified portfolio of South African private equity assets with some exposure to the rest of Africa. The focus is on secondaries and direct co-investments with an investment bias towards cash-generative leveraged buy-outs. There are a number of benefits to this approach as it enhances the speed of asset deployment, increases portfolio diversification (sector, vintage and counterpart) and makes the normal private equity J-curve less deep and pulls it forward. Our team’s vast asset origination network is also enhanced due to its co-investment access to assets that are originated by the broader FirstRand platform which are not necessarily available to the investment market. The funds target an IRR of CPI+10% net of fees.

Mezzanine financing

The Ashburton Investments mezzanine fund’s objective is to provide investors with regular cash distributions, in the form of quarterly interest repayments, together with longer-term capital gains, in the form of equity related upside. This approach enhances investor liquidity while reducing the investor’s value at risk. Investments are made in established companies with proven cash flow generation capabilities that are looking to grow, recapitalise or acquire new businesses. Black economic empowerment transactions as well as infrastructure transactions also form part of our investment universe which enhances portfolio diversification. Our team’s vast asset origination network is also enhanced due to its access to assets that are originated by the broader FirstRand platform which are not necessarily available to the investment market. The fund targets a gross IRR of 17-22%.

Impact investing

Our Impact Funds offer a unique opportunity to participate in investment solutions that address the challenge of access to economic opportunity and unemployment in South Africa. Specifically, the focus is on investing in sustainable business models that are seeking debt to fund expansion, thereby contributing to sustainable job creation. 

Their profile is for cash-like volatility and aims to beat inflation by 3% on a rolling three year basis with the added benefit of a positive social impact return. The new R900 million fund will replicate our current R700 million fund which has exceeded the target CPI + 3% returns since inception (31 January 2015). Impact targets have also been comfortably met.

Unlisted credit opportunities

Is suited for investors who are looking for returns in excess of cash and money market funds over a long-term horizon, while at the same time require a degree of capital stability, with limited requirements for daily liquidity. Seeking managed exposure to income generating investments with limited duration risk. Wanting to take advantage of loans originated by one of the leading investment banks in the country (RMB) across a broader range of issuers than available in the listed bond market. The fund aims to achieve its return target by investing in diversified portfolio of debt instruments, predominantly in the form of bank loans to South African corporates which pay a floating rate linked to JIBAR plus a margin thus limiting volatility with respect to changes in interest rates. The co-investment arrangement requires RMB to remain invested in any loan acquired by the fund up to at least the exposure of the fund over the entire tenor of the loan.

Infrastructure debt

The fund invests in a diversified portfolio of projects with a contractual commitment to pay inflation-linked interest, linked to the South Africa Consumer Price Index. It invests in a diversified portfolio of projects across different technologies including solar photovoltaic, onshore wind, concentrated solar power, hydro and biomass.

 

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