Share With
When it comes to transformation in South African business, doing things the way they’ve always been done simply isn’t tenable. New approaches are needed. That’s what makes Thuso, a ground-breaking incubation platform in the South African asset management space, so exciting.
And with South Africa’s already strained economic and social environment facing unprecedented pressure due to the Covid-19 pandemic, there’s never been a greater need for an urgent rebalance of the South African economy and the asset management industry in particular.
A seasoned builder of businesses and investment capacity
A partnership between Ke Nako Capital and its black staff, Thuso Incubation Partners was founded on the principals of:
True broad-based transformation encompassing:
- Demographic and gender diversity
- Skills Transfer and mentoring
- Cultivating and supporting independent management owned teams
Social Responsibility through:
- Internships
- Mentoring
- Community based projects
The people and intellectual property embodied within Thuso have a 16 year demonstrable track record of incubation, portfolio construction, strategy/capacity creation in South Africa. The track record transcends experience, having incubated teams in the direct property (unlisted), credit specialists, hedge funds (multiple strategies), mezzanine debt, listed property and long only equity portfolio managers. In Q1 2019, Thuso launched Hodisang Fund I, which is South Africa’s first dedicated Black SA PE Manager Incubation platform. During Q4 2019, meanwhile, it launched Thuso Private Markets Fund 1: a blended fund focusing on a combination of private equity and real assets.
Beyond performance
Thuso is a champion of black private markets talent and in particular the talent that will reside within an independent entrepreneurially driven boutique. Thuso is unique in that it has already demonstrated the ability to cultivate, create and self-generate capacity that does not yet exist in the market. Self-originated opportunities is a clear differentiator relative to our peers. It is not just an allocator of capital with a fund monitoring overlay thereafter — its Alpha is clearly visible and measurable both from a quantitative and qualitative standpoint.
Impactful return profile
Leveraging this blend of experience and track record within incubation, Thuso aims to achieve attractive returns for its institutional investors. Its model for achieving its targeted returns is predicated on targeting mid-market specialists, as opposed to large or mega cap projects or managers who allocate to this targeted opportunity-set.
Beyond financial returns, however, Thuso hopes to influence all stakeholders and partners in its programme to achieve the desired outcomes of not only its vision but also to aid in the reconstruction of the South African economy post Covid-19. Some of the measures it takes with investee companies include increasing the level of BBBEE policy implementation, improving diversity, and providing job shadow programmes and mentoring for tertiary students.
“We believe that our model is key to overcoming some of the existing misconceptions around transformation,” says Thuso CEO Olwethu Cata. “We want to show the companies we invest in that, by taking a meaningful approach to transformation, they won’t just be more diverse but will actually be better, more investable businesses.
According to Thuso’s leadership, the strength and the sustainability of the organisation is inextricably linked to its incubatees. These include Vuna Partners, Tamela and Moshesh Partners.
“We know that we’re only as strong as our partners,” says Cata. “Thanks to the model we use and the level of detail we take with incubatees, we know we have stronger partnerships than almost anyone else in the industry”.
Vuna Partners is a 100% black owned private equity manager, with a high-response investment team drawn from diverse backgrounds.
“We’re incredibly selective in our investment approach,” says Siya Nhlumayo, partner at Vuna Partners. “That not only serves our investors well but also ensures that the projects we invest in get the most out of our investments.”
Moshesh Partners, meanwhile, is a renewable energy and clean solution infrastructure specialist.
“We know that the Thuso team has a strong background in environmental, social and corporate governance (ESG) investment,” says Moshesh CEO Sifiso Shongwe. “That meant that they understood what we were trying to achieve both in terms of securing South Africa’s long-term energy viability and empowering its people”.
Tamela is a black owned and managed investment, corporate finance advisory (including JSE sponsor services) and fund management company, which was founded by Sydney Mhlarhi and Vusi Mahlangu in 2008. It has a long track record of success, with Mhlarhi and Mahlangu having launched South Africa’s first mezzanine fund, which also focused on empowerment funding.
“We think what Thuso is doing is really exciting,” says Mhlari, “and we’re incredibly proud to be on the transformation journey with them”.
Throughout the remainder of 2020 Thuso will introduce a further 6 teams to its platform and in turn the market. These high-quality majority black owned teams shall cover infrastructure, property and private equity.
A data-led approach
Thuso uses its extensive data sets in unlisted investments to corroborate its investment thesis. This information is not readily available in the public domain and can only be gathered by being a trusted partner for a number of years.
Long-term vision
Thuso has rapidly positioned itself as a scaled up new entrant within the black asset management sector. We have been blessed and are humbled by the support that the pension fund community has bestowed upon us.
While Thuso has already made massive strides since its launch, it views these wins as just the start.
“There is an incredible amount of work to be done when it comes to transforming private markets industry in South Africa, but we hope that our model shows what’s possible,” says Cata. “While we know we can’t do it all, we want to be at the forefront of this kind of multi-level transformation and empowerment for a long time to come”.
