Vantage Capital, Africa’s largest mezzanine debt fund manager, announced today that it has fully exited its investment in New GX Capital (“New GX”), a leading 100% black family owned investment holding company in South Africa.
This exit achieves returns for Vantage’s Fund III investors of more than 35%. Vantage provided R250m ($20m) to New GX in 2016 to finance follow-on investments in telecommunications infrastructure, waste management and information technology.
Mokgome Mogoba, Associate Partner at Vantage Capital, said, “We provided R250m of growth capital to New GX which enabled the group to more than double its net asset value over the two-year tenor of our investment. New GX invested in South Africa’s fast-growing fibre and telecoms infrastructure sectors through investee companies Dartcom and DFA.
New GX Enviro built a first of its kind R200m multi-purpose waste recycling plant in Atteridgeville Township in Tshwane providing employment to township residents and boosting the township economy. Our partnership bolstered local manufacturing capacity by constructing a R100m fibre manufacturing plant 1km from Mamelodi township in Tshwane.
New GX invested in a state of the art information technology platform with partners from India that employs over 200 people. We plan to support more talented black industrialists like Khudu Pitje, the founder and CEO of New GX, as we seek to transform the South African economy and uplift the township economy.”
Luc Albinski, Managing Partner at Vantage Capital, added “Fund III investors have had a bumper ride with strong returns being generated from investments such as Vumatel, Servest and New GX. These results support our view that well-selected and structured mezzanine debt deals can generate returns that rival traditional private equity returns with less downside risk.”
Khudu Pitje, CEO and founder of New GX said, “Our Partnership with Vantage should be considered as a template for addressing the elusive equity gap in the development of black industrialists. Vantage bridged the gap to develop our family business into a much more meaningful industrial group that will play a significant role in creating jobs for the youth of our country. We will in due course announce the next phase of our development.”
Graham McGregor, CFO of New GX added, “Vantage encouraged us to improve our reporting and risk management capabilities. The Vantage team worked through two challenging cases that we faced and never wavered in their support and understanding for our vision of building a leading black owned investment company.”
To date Vantage has successfully exited eight investments generating proceeds of R2.5bn across its three generations of mezzanine debt funds and achieved an aggregate money multiple of 2.0x.