Ten years have passed since Futuregrowth launched the Development Equity Fund to invest in key infrastructure and development projects in South Africa, making this one of the first of its kind in South Africa.
Today the fund has grown to R2.5 billion, including committed capital, with approximately R2.2 billion of client funds deployed across 44 investments. Since inception, the Fund has invested in 34 private equity assets, with three exits concluded on internal rates of return ranging between 20% and 332%.
As part of Futuregrowth's suite of development funds the Fund has a mandate to make equity and related investments in socially responsible or developmental assets in southern Africa. Of the fund investments, 94% are classified as medium- to high-impact investments with over 56% benefitting the rural and peri-urban areas of the country. Investments cover a broad range of sectors including roads, infrastructure, health, agriculture, aquaculture, renewable energy, transport, housing, education and enterprise development.
Since the launch of the fund ten years ago in September 2006, the Fund has delivered 18.5% per annum return, well ahead of its benchmark, CPI+10%, of 16.3% per annum.
Portfolio manager, James Howard, said that the last ten years had seen varying investment and economic cycles. “We are currently experiencing a challenging macro-environment but we believe the fund is well-diversified and positioned to withstand the headwinds we face. With our partners in our investments focused and motivated, we are confident we can continue to deliver on performance expectations. This is a long-term game, and we are committed to making sustainable and responsible investments that benefit the economy, communities and South Africa as a whole,” he said.