Ethos Capital is looking to raise up to R2bn ($139.17m) through a private placement on the main board of the Johannesburg Stock Exchange (JSE) in August.

Subject to market conditions and the requisite approvals by the JSE, Ethos Capital will issue up to 200 million A ordinary shares to selected and institutional investors.

Commitments of approximately R1.076bn in aggregate have been received from selected investors, including Ethos Private Equity.

Peter Hayward-Butt, CEO of Ethos Capital, said: “We are progressing our plans to list Ethos Capital on the JSE. The listing will provide the market with a unique opportunity to invest in a diverse pool of unlisted small to medium-sized companies in funds managed by the Ethos Private Equity, the largest private equity player in sub-Saharan Africa.”

“Ethos Private Equity’s historical performance has consistently outperformed the listed benchmarks with 57% of its 91 realized investments having returned greater than three times the original invested capital, and 93% of realized investments having returned greater than twice the capital invested,” he added.

Ethos Capital will list as an investment entity in the “Financials – Speciality Finance” sector of the JSE and will offer investors long-term capital appreciation by investing, directly and indirectly, in a diversified portfolio of unlisted investments managed by Ethos Private Equity.

The main purpose of the offer and the listing is to raise capital to enable Ethos Capital to implement its investment strategy and provide a liquid access point to enable public market investors to obtain an exposure to a diversified pool of unlisted assets and participate in Ethos Capital’s long-term growth prospects.

It is anticipated that the net proceeds from the listing will be invested in the following strategies: primary investments, secondary investments, direct Investments, and temporary investments.

It is possible that Ethos Capital will raise further capital from shareholders in the future, if the appropriate investment opportunities arise. 

The board of independent directors of Ethos Capital will be chaired by Yvonne Stillhart and is composed of experienced private equity professionals all of whom are independent of Ethos Private Equity.

Ethos Capital’s investment committee will comprise non-executive directors Michael Pfaff and Derek Prout-Jones who have significant experience in the private equity industry. 

The investment committee will review investment opportunities and make recommendations to the Board who will make the ultimate investment decision.

Hayward-Butt added: “Ethos Capital’s non-executive board has an extensive understanding of, and significant experience in, the private equity industry and will apply this experience in order to make optimal investment decisions for the company.”

“Ethos Capital has been set up to provide investors with the opportunity to build a long-term investment relationship with Ethos Private Equity. Significant care has been taken to ensure that the interests of Ethos Capital shareholders and those of Ethos Private Equity are aligned for the long-term and to ensure that there are no “fees on fees” in the structure. To strengthen the alignment of interests, Ethos Private Equity will acquire 5% of the A shares over time,” he added.

Rand Merchant Bank, a division of FirstRand Bank, is acting as the financial adviser,  sole global coordinator, bookrunner and JSE sponsor in relation to the listing.