RMB Corvest reviews the contribution it has made to Black Economic Empowerment over almost two decades, celebrating the far-reaching impact of BEE funding.
RMB Corvest first provided BEE finance in 1998: nine years before BEE codes were officially established and implemented. “Of particular interest and value for us are BEE transactions that involve local businesses with good growth potential,” notes Mike Donaldson, CEO: RMB Corvest.
To date, RMB Corvest has invested in a broad spectrum of well-managed, medium-sized businesses that hold proven performance records. Their current portfolio consists of more than 60 investments spread across different sectors and jurisdictions.
RMB Corvest’s own track record is both expansive and impressive – and is additionally saturated with success stories regarding Black Economic Empowerment.
In 2004 RMB Corvest alongside Safika Holdings established a R306 million BEE private equity fund that proved to be very successful and went on to acquire a number of different equity stakes in a range of businesses. Although the fund is fully invested, there currently six equity investments still in place today. Noteworthy investments from this early fund included the likes of Servest, G4S Cash Solutions and Chemimpo.
Later the same year, RMB Corvest established a broad-based fund, Tandem Capital, which was subsequently acquired by the Shalamuka Foundation. A spread of investments across a diverse spectrum of sectors have been made by RMB Corvest’s partnership with Shalamuka. “A steady progression of leveraged buy-outs and equity investments has ensured a diverse portfolio of interests for RMB Corvest and Shalamuka, including such varied brands as Fidelity Security, Dupleix Liquid Meters, and Sunspray,” notes Donaldson. “These transactions have additionally enhanced the BBBEE scorecard of the companies targeted.”
Continuing with its BEE focus and funding RMB Corvest set up an additional BEE fund during 2006 alongside Sandile Zungu, being Zico Capital. The first R500 million as well as the second R500 million has been fully deployed in equity investments and as a result RMB Corvest has committed a further R500 million to Agile Capital. Investments made include AutoZone, Henkel, Provest, Innovation Group and Aquatico to name just a few.
RMB Corvest has to date invested in 88 BEE transactions, 46 of which were concluded by the above BEE funds and a further 35 that involved other BEE investors in separate stand-alone black empowerment transactions. RMB Corvest has provided some R2,4 billion funding in these transactions.
“The benefits for companies in securing the right BEE partner in today’s South Africa cannot be underestimated, whether it be for securing new contracts or assisting management in rolling out their strategies to succeed in a very challenging and complex environment, “ says Donaldson.
RMB Corvest is always looking to invest capital into high growth sectors across South Africa and the rest of Africa. The growth of private equity in South Africa for the future will however largely depend on the ability of PE players and investee companies to unlock the potential value that BEE can add to all stakeholders.
About RMB Corvest
RMB Corvest is a private equity company and a member of the First Rand Group. Its status as an on balance sheet private equity company allows it to use its own funds for investment rather than third party funds. This ensures that the company is able to invest for the longer term and is not subject to exit timing pressures. For more information on RMB Corvest visit www.rmbcorvest.co.za.