Our allocations to GPs and their funds are made across multiple vintages and strategies. Our competitive advantage is our track record of delivering proprietary deal flow to our GPs, which has enabled us to build stronger relationships with them.
We meet with our managers regularly throughout the year and work closely with them on co-investment opportunities, where we also build a “live confirmation census” of the quality of the team we have committed to. As past performance is not always indicative of future performance, we use this census to gain a deep understanding of the team, and its strategic and structuring dynamics, so that we’re well-positioned to right-size allocations to GPs in future vintages.
Ke Nako has conducted advanced due diligence on all the funds and fund managers operating within the South African private equity market; and we have opted to invest in 14 funds to date. Based on this risk intelligence and our extensive experience in this market, we are confident that we have aligned our organisation and our investors with the highest-calibre managers in South Africa.
We are a first mover in these engagements, due to our size and our relationships with potential sellers of Lending Partners’ stakes in existing funds.
We are disciplined in our pricing and seek to include secondary positions to both enhance performance and provide liquidity for investors (shorter-term holding period than a primary investment).
Having carefully vetted more than 20 secondary opportunities across South Africa, we have selected to invest in four deals to date. These decisions were based on advanced due diligence, underpinned by our unrivalled insight into the South African fund industry, and deep knowledge of the local economic environment and corporate landscape. This provides us with clarity in assessing the likelihood of our internally generated targeted return being achieved.
Co-investments provide our investors with above average net returns through superior deal selection and significantly reduced fund expenses.
Ke Nako has vetted more than 80 co-investment opportunities in South Africa, selecting to invest in nine deals to date. While this due diligence process is driven from the bottom-up, we are also acutely focused on using our co-investments to tilt our portfolios in the direction of investment themes we believe will outperform the market. Our long track record in investment, extensive network and proprietary risk management system have allowed us to materially augment our due diligence capabilities.
Our co-investment programme has become a key building block in our portfolios, as we secure closer relationships with our GPs and, most importantly, position ourselves to deliver a better net return to our investors.
