South African venture firm Hlayisani Capital manages nearly one billion rand ($60 million) across three venture capital and private equity funds that support growing businesses, mainly in South Africa. Hlayisani has secured 500 million rand ($30 million) in commitments to reach a first close of Hlayisani Venture Fund II, including funding from South Africa’s Public Investment Corp., the SA SME Fund, and family offices and private investors.
The fund will back Series A rounds for AI, digital infrastructure and tech-based solutions to financial inclusion, health and education. It aims for a June final close. The fundraise marks “a significant shift in institutional investing as pension funds show a real interest in venture capital,” the firm said (see, “Putting Africa’s pension funds to work for Africa’s social infrastructure”).
Early investments include Spatialedge, which helps companies make faster, data-driven decisions, financial risk modeling provider Cogitait AI, and media company Tractor Outdoor.
Black managers
Hlayisani, which means “to nurture and grow,” is among the largest Black-owned venture investors in South Africa. It qualifies as a Level 2 “Broad-Based Black Economic Empowerment” fund manager, a designation established in 2014 to support local managers and share wealth more broadly.
“In markets which are skewed and unequal such as ours, we do come as one of the bigger supporters of [Black managers],” Sifiso Sibiya of the 2.3 trillion rand ($163 billion) Government Employees Pension Fund, managed by PIC, told ImpactAlpha.
He says better alignment between institutional capital providers and fund managers could help spur more local investment. Pensions are interested, he said, but fund managers need to understand the “capital allocator point of view,” and structure and package their products with clear transparency around expected returns.
“Because all the pension funds have a minimum return that they must achieve, it goes without saying that whatever is being packaged must exceed that minimum.” (See, “This regulatory reform could unlock African pension capital for impact fund managers”).
