Ata Capital, a majority black-owned and 100% black managed investment management company, is raising its third fund and is targeting R1.5bn from South African institutional investors. 

Maredi Mampuru, Head of Client Relations at Ata Capital, said: “Our first close was in October 2018 at around R600m and we’re busy with the due diligence now. The process is quite long. We’ve started engaging with investors about a year ago.” 

“We made some good progress; our pipeline is looking good. The difficulty with raising fund in the pension fund environment is that we’ve got Regulation 28, which limits the amount that pension funds can invest in unlisted instruments. In turn, that limits the amount we’re able to raise. It also means that we can only target certain funds within South Africa,” he told Africa Global Funds.

“I think the space that’s been pretty friendly to us is the family offices in South Africa. We were able to raise capital from family offices for all three funds. In the new fund we’ve got two family offices and we’re negotiating with others. But other institutions, like insurance companies, are holding back a little bit due to some regulations that may possibly restrict their decision to invest in private equity.”

According to Mampuru, they haven’t gone out to fundraise outside of South Afica as such, because they think there are enough investors in South Africa. “We continue to engage though with investment consultants that have access to both South African and non-South African clients,” he says.

“I also think that to go and raise fund in the US, for example, you really need to have good connections and people who know the actual asset owners,” he added.

Ata Fund III is a BEE (black economic empowerment) Value Fund, with a focus on primary and secondary BEE deal opportunities. 

The Fund can therefore participate directly as a BEE investor and contribute to the BEE ownership scorecard of its investee companies.

It will leverage off the tested investment techniques applied in its predecessor funds to identify deep-value investment opportunities. 

“We look at mid-market space and we look for companies with positive cash flows and good management in place. The BEE strategy allows us to a certain extent to negotiate an entry discount,” said Mampuru.

Ata Capital is a fund management company established to carry out the business of attracting and managing private and institutional investor capital.

The company is majority black-owned and black-managed and was founded in 2012 by Lelo Rantloane, together with the Harris Family Office.

The company also has a significant broad-based black shareholding.