HILARY JOFFE: New SME Fund plans to grow venture capital in SA
The unprecedented R1.5bn initiative is the first tangible outcome of the partnership between business and the government to avert a ratings downgrade and boost growth
IT IS pretty unusual for a bunch of SA’s largest corporations to subscribe for shares in a newly formed company that has not promised them any particular rate of return, nor has a clear investment mandate. Yet that’s exactly what more than 50 companies, including about 70% of the JSE’s top 40, have done, putting R1.5bn of capital into the new small and medium enterprise fund (SA SME Fund), which is one of the first tangible initiatives to come out of the partnership between business and the government to avert a ratings downgrade and boost growth.There is already an impressive board in place, and the company is recruiting a permanent CEO, who will work with a yet-to-be-established investment committee to define the mandate and modus operandi more precisely, with money being deployed from early 2017. Broadly speaking, though, the fund comes out of a recognition that smaller companies create jobs — not big ones — and that big business needs to invest to create an environment that will...
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