Investment Portfolio

Overview

Medu I and II were formed to make privately negotiated equity and equity-related investments. The investments typically range from R50 million to R200 million and include companies operating in the basic industries, consumer goods, services, information technology, general industrials, financial services and resources sectors of the economy. A significant minority or majority of equity interests (typically ranging from 15% 80%) are acquired in a diverse portfolio of companies, with no more than 20% of the aggregate commitments invested in a single portfolio company.

Objectives

  • To achieve above average long-term returns for its investors
  • To promote a scorecard approach to BEE in its portfolio companies

Strategy

Medu Capital targets investment opportunities which display the following features:

  • Attractive businesses with competent management teams
  • Established businesses with good track records in terms of profitability and cash flow generation
  • Above average earnings growth prospects and strong cash flow generation

The key management team of the portfolio company are supported and encouraged to be significant shareholders in the business. Each investment is structured to provide:

  • Medu Capital with board representation
  • Alignment of interest among the key shareholders
  • A value-enhancing plan for all shareholders

The transactions, which could involve private and/or public companies, may take a combination of the following formats:

  • Management buy-outs or buy-ins of companies alongside management teams
  • Entrepreneurial partnering transactions to support proven entrepreneurs to enhance business value
  • Expansion capital for companies with significant growth prospects. Such investments will provide critical funding to established businesses that are positioned to take advantage of organic growth and acquisition opportunities
  • Companies seeking to enhance their BEE credentials
  • Replacement capital for companies seeking to replace retiring shareholders or restructuring of the shareholding of the company