In recent weeks, South Africans have seen growing evidence of the devastating impact of the protracted lockdown on the economy. There is now a body of evidence suggesting that the contraction in Gross Domestic Product could be as severe as 10%, and the country looks set to experience the worst recession in living memory. If productive capacity is not preserved, South Africa could experience an L-shaped recession, whereby it takes a decade for the economy to return to its 2019 size.
This has prompted South Africa’s largest investment manager, the JSE- and LSE-listed Ninety One (previously Investec Asset Management) to launch an impact investment initiative – the Ninety One SA Recovery Fund, in association with Ethos Private Equity. The fund’s objective is to support the country’s productive capacity and economic recovery from the effects of the COVID-19 pandemic, while seeking an attractive return for investors.
With a focus on the urgency of the economic situation in SA, Ninety One istargeting a first close of the fund in July 2020. Ninety One will be targeting a fund size of R10bn, with funding raised via two closes from South African institutional investors.