Medu Capital, a South African private equity firm, is planning to close two investments via its third fund, according to Siyabonga Nhlumayo, Principal, responsible for investment execution and management.

“We only have two investments on the book and hopefully in the next month or two we will be in the position to report on our investments,” Nhlumayo told Africa Global Funds.

Medu Capital closed its latest private equity fund in October 2014.

The Fund III achieved its first close in 2013 and since then closed two deals: Van Schaik Bookstores, a retailer servicing the academic community in South Africa and Namibia; and a company, which develops, manufactures and sells simulators for mining and construction machine operators.

“We should have four investments by mid-2016. We have a diverse investment program and we are not sector specific,” said Nhlumayo.

With funds under management of over R1.6bn, Medu Capital partners established businesses that require equity risk capital and/or BEE partners.

“We have a general mandate and we can invest in most sectors. However we do have DFIs invested in our fund and through their mandates we can’t invest in the “sin” industries such as weaponry or liquor,” he said.

The investments typically range from R50m to R200m and include companies operating in the basic industries, consumer goods, services, information technology, general industrials, financial services and resources sectors of the economy.

“All our investments today have been in South Africa. However, as our mandate allows us to invest outside South Africa, we continue to evaluate investment opportunities in the rest of the continent”, commented Nhlumayo.

Apart from acquisitions, the fund manager is focusing on divestments.

So far, Medu Capital Fund II has invested in eight businesses and had two realisations.

“We’re focused on exits in the remaining six businesses. In the next 18-24 months we should be in the position to have fully realised our second fund,” said Nhlumayo.