R1.5bn private sector SME Fund established - CEO Initiative

Over 70% of the top 40 companies on the JSE are supportive of the Fund

Milestone achieved in establishing the R1.5bn private sector SME Fund

18 September 2016 

The CEO Initiative – under the auspices of the Minister of Finance to avert a downgrade and foster inclusive economic growth – has announced a key milestone in establishing the R1.5bn private sector fund to stimulate entrepreneurship and support the growth of small and medium enterprises (SMEs). With SMEs widely acknowledged to be key drivers of job creation and economic activity, the Fund will invest in high-potential entrepreneurs and SMEs, and will provide them with access to a cohort of experienced mentors. 

As PIC CEO Dr. Dan Matjila comments: “This is ultimately about creating the next generation of national champions. Entrepreneurs and businesses create jobs. And by assisting them, we are building the future.”

The Fund is seeded with capital from the private sector, of which R1.5bn has already been committed. Over 70% of the top 40 companies on the JSE are supportive of the Fund, with many more listed and unlisted companies participating. Over time, the public sector will contribute matching funds. In the medium term, a JSE listing is envisaged to provide liquidity and an exit mechanism for investors, while ensuring that the Fund is able to generate its own capital.

The CEO Initiative’s SME workstream, led by Discovery founder Adrian Gore and Bidvest founder Brian Joffe, embarked on multi-stakeholder consultations to explore how best to drive entrepreneurship. They consulted National Treasury, the departments of Small Business and Science & Technology, as well as the major business associations, financial and professional services firms, and small and large fund managers. All agreed that the major obstacles stifling the success of small businesses were a lack of equity funding for start-ups, insufficient risk appetite for Venture Capital funding and highly skilled mentorship.

The Fund is designed to address these challenges. Under the chairmanship of Adrian Gore, the Fund’s Board comprises respected CEOs and entrepreneurs made up of Brian Joffe, Jabu Mabuza, Christo Wiese, Dolly Mokgatle, Judy Dlamini, Nigel Payne, the PIC’s Dr. Dan Matjila and National Treasury DG Lungisa Fuzile.

Interim CEO Lisa Klein has been driving the initiative and setting up the company. She is assisting the Board in finding a permanent CEO. The aim is to have the permanent team in place by the end of the year. The team will begin accreditation of private equity and investment funds in Q4 2016, with the first monies being deployed in Q1 2017. An Investment Committee of respected and experienced private sector players will also be established by end 2016.

Discovery founder and Chief Executive Adrian Gore says: “SMEs are of a few entities that can create jobs at the quantum required. Yet almost 75% of small businesses fail. This Fund will not only provide high-potential entrepreneurs and SMEs with access to capital, but it will also seek to connect entrepreneurs to a network of critical business and technical skills required to scale their businesses.”

“We have had an overwhelming response from many existing and retired senior executives who want to give back by joining the mentorship panel. This is truly a ‘money can’t buy’ offering,” says Bidcorp Chairman Brian Joffe.

Jabu Mabuza, Chairman of Busa, puts it: “This is positive for South Africa. It shows that despite the political debate, Business continues to focus on stimulating economic growth. SMEs will be the key driver of job creation, and this Fund is an important initiative in this space.”

For more information visit www.sasmefund.co.za.


Notes to editors:

About the CEO Initiative

The CEO Initiative is a group of approximately 90 chief executives and business leaders working with government and labour to build confidence in the economy and reignite sustainable economic growth. To this end, the Initiative formed four work streams to:

Work on finding investment opportunities in eight high-potential sectors, including agriculture, tourism and small- and medium enterprises

Find ways to get more young people into the workforce and so decrease the youth unemployment figure;

Identify opportunities to foster entrepreneurs - the establishment of the SME Fund is the result of this work stream

Address issues to avoid a sovereign credit ratings downgrade and put the country on a sustainable and inclusive growth path.

To date, the following organisations and CEOs have committed to participating in the SME Fund:

Adcock Ingram - Andrew Hall

Anglo American Platinum - Chris Griffith

Arrowhead Properties - Gerald Leissner

Barclays Africa - Maria Ramos

Bidcorp - Brian Joffe

Bidvest - Lindsay Ralphs

Capitec Bank - Gerrie Fourie

CIG - Raoul Gamsu

City Lodge Hotels - Clifford Ross

Coronation Fund Managers - Anton Pillay

Curro Holdings - Chris van der Merwe

Discovery - Adrian Gore

Distell - Richard Rushton

Firstrand - Johan Burger

Growthpoint - Norbert Sasse

Hollard - Nic Kohler

Imperial Holdings - Mark Lamberti

Investec Property Fund - Nick Riley

Investec Ltd - Stephen Koseff

JSE - Nicky Newton-King

Kumba Iron Ore - Themba Mkhwanazi

Liberty - Thabo Dloti

Mediclinic International - Danie Meintjies

MMI Holdings - Nicolaas Kruger

Mr Price Group - Stuart Bird

MTN Group - Phuthuma Nhleko

Murray & Roberts - Henry Laas

Nandos - Geoff Whyte

Naspers / Multichoice - Imtiaz Patel

Nedbank - Mike Brown

Netcare - Richard Friedland

Old Mutual - Ralph Mupita

PIC - Daniel Matjila

Pioneer Foods - Phil Roux

PSG Group - Piet Mouton

PSG Konsult - Francois Gous

RCL Foods - Miles Dally

Rebosis Property Fund - Sisa Ngebulana

Remgro - Jannie Durand

Richemont - Johann Rupert

RMI - Herman Bosman

Sanlam Limited - Ian Kirk

Santam - Lize Lambrechts

Sasol - Bongani Nqwababa, Stephen Cornell

Standard Bank Group - Sim Tshabalala, Ben Kruger

Steinhoff/Wiese Group Companies - Christo Wiese

Sun International - Graeme Stephens

Telkom - Sipho Maseko

The Spar Group - Graham O’Connor

Vodacom Group - Shameel Joosub

Zeder Investments Limited - Norman Celliers

Statement issued by SA SME Fund, 18 September 2016