Capitalworks Group, a South African private equity firm with over $1.6 billion in assets under management, has launched its fourth flagship fund, aiming to raise $350 million (about 5.7 billion South African Rand), about 27% higher than the corpus of its third vehicle.
The Johannesburg-based firm, which makes mid-market buyouts and growth investments in the South African region, has also marked the first close of the vehicle Capitalworks Private Equity Fund IV (CWPE IV). Capitalworks did not disclose the size of the first close.
The fund secured commitments from new investors including Standard Bank Group and International Financial Corporation (IFC), the private investment arm of the World Bank Group, and existing investors in the first close.
The investment is one of IFC’s largest private fund investments in South Africa recently, with the global development institution committing up to $80 million, comprising a $40 million commitment to the fund and a $40 million co-investment envelope.
“The first close comes against a backdrop of improving investor sentiment toward South Africa, supported by recent sovereign rating developments and a more constructive macroeconomic outlook. Capitalworks believes this environment is creating attractive entry points for disciplined, patient capital,” the firm said in a LinkedIn post.
Through the vehicle, Capitalworks will make buyout transactions and invest in mid-market South African businesses with strong market positions and opportunities to scale, similar to its strategy in the previous vehicle. The fund backs established businesses that have strong fundamentals, defensible competitive positions and clear avenues for growth across industries including FMCG, logistics, industrial services, retail and hospitality.
Founded in 2006, Capitalworks is one of South Africa's leading mid-market private equity managers. It closed its previous flagship fund Capitalworks Private Equity Fund III in 2020 securing capital commitments worth $275 million. Its second vehicle achieved final close in 2012, raising about $200 million.
“Twenty years in, and the conviction is the same as when we started: South Africa's mid-market is full of exceptional businesses waiting for the right capital and the right partner,” Darshan Daya, co-founder of Capitalworks Group said in a LinkedIn post. “South Africa's mid-market continues to offer compelling opportunities, and we're looking forward to putting this capital to work alongside ambitious management teams.”