Private Equity | Agri-Vie founders & STANLIB launches independent Private Equity business

Johannesburg, South Africa, Capital Markets in Africa — The founders of Agri-Vie Investment Fund, the African private equity fund focused on the food and agribusiness sector, and pan-African asset manager STANLIB, are proud to announce the formation of EXEO Capital – an Africa-focused private equity partnership – which will allow both parties the opportunity to expand their alternative investment offerings. STANLIB has taken a partnership stake in EXEO Capital.

Following the success of the first US$100 million Agri-Vie fund, which has been deployed in a portfolio of 12 investments in Eastern and Southern Africa, EXEO Capital will be spearheading the imminent launch of Agri-Vie Fund II during the second quarter of 2016. The new EXEO partnership will over time continue to launch further private equity vehicles in strategically selected sectors aligned with growth trends in Sub-Saharan Africa.

This partnership adds private equity to STANLIB’s alternatives offering which includes Infrastructure, High Yield Credit and Direct Property investment capabilities. According to Seelan Gobalsamy, STANLIB CEO, the new private equity partnership is a significant milestone in the company’s journey to build an alternative investment platform. “STANLIB has built Pan-African investment expertise in direct property, infrastructure and high yield debt. Our partnership with EXEO allows us to now complete our alternatives suite by adding a private equity capability.”

Herman Marais, managing partner at EXEO Capital and Agri-Vie co-founder, says that the momentum achieved by the firm in the African private equity market to date allows the EXEO partnership to expand its investment capabilities across broader geographical regions and industries. This will in turn allow investors to explore other mid-market private equity investment opportunities on the continent.

“We have found a strategic partner in STANLIB who shares our investment philosophy and will enable us to accelerate the growth and strategic diversification of our Africa private equity business, while retaining ownership and management control as an independent investment manager,” says Marais.

Marais states that EXEO will manage private equity allocations from South African and global institutional investors, which will increase to US$275 million upon the launch of Agri-Vie Fund II.

Gobalsamy says that investment in listed equity markets in the rest of Africa is fairly limited given the lack of depth and liquidity. Private equity provides an alternative method for investors to access investment opportunities across Africa. “STANLIB wants to be associated with a partner who sees the opportunity in Africa, as we believe in the long term potential of the continent and have on the ground presence in 10 African countries. We will leverage off the excellent track record and depth of experience in EXEO Capital’s management team to offer our customers portfolio diversification and access to investment growth in the rest of Africa,” says Gobalsamy.

EXEO’s investment team invested 55% of their first fund into Sub-Saharan Africa, while the balance is invested in food and agribusiness companies in South Africa. Patrick Mamathuba, Chief Investment Officer – Alternative Investments: STANLIB says that three-quarters of EXEO’s next fund is earmarked for investment on the rest of the continent, which is in line with STANLIB’s commitment to the continent.

“This transaction is an ideal fit that will enable us to continue delivering on our investment promise to customers. It strengthens our existing capabilities and introduces new ones where we believe there will be strong future demand based on global trends,” says Mamathuba.

Gobalsamy says that EXEO’s philosophy of wanting to leave companies and the communities in which they operate in a better state than they found them in fits well with STANLIB’s desire to make a difference to the financial and social wellbeing of its customers.

According to Marais, the transaction with STANLIB allows EXEO, as an independent investment manager, access to the broader Liberty Group, which is focused on building its operations on the continent, and to Standard Bank, which has an extensive network across Africa. “We are excited about the opportunities arising from this pan-African network for our investment management business and its investors,” concludes Marais.