News24 | SA pension funds return to private equity, helping investment to triple to R13bn

A surge in investment in private equity is predicted for 2027.

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A majority of private-capital firms in southern Africa expect business to be brisk next year and beyond as higher fundraising and more money from exits free up capital for new deals, a survey showed.

About 57% of respondents in an industry survey by the Southern African Venture Capital and Private Equity Association released on Tuesday expect high deal flow next year, with a further 6% saying it will be very high.

The optimism follows a slowdown in dealmaking in 2025, when investment value fell 16% to R22.4 billion, and the number of transactions declined 18% to 186.

Managers have R45.4 billion of so-called dry powder, or undrawn commitments, available to invest. That’s about twice the value of investments last year, “leaving private-capital firms with sufficient capacity to support an increase in future deployment,” the report said.

The outlook signals a potential turn in the private-capital cycle, with more funds from exits returning cash to investors that can be committed to new funds, while managers have substantial capital available to deploy.

Fundraising by private-capital firms for investment in South Africa almost tripled last year to the highest in at least a decade as pension funds returned to the asset class and exit proceeds rose. Money raised for use in the continent’s biggest economy climbed to R12.7 billion in 2025, compared with R4.6 billion a year earlier, it said.

For southern Africa as a whole, fundraising more than doubled to R22 billion, the second-highest level in a decade, it said.

South African investors accounted for 55% of total fundraising, up from 36% in 2024, with pension and endowment funds increasing their commitments to R4.4 billion from R1.6 billion.

The regional improvement contrasts with a 17% decline in private equity fundraising globally, with the total dropping to $659 billion from a year earlier as the number of funds closed decreased for a third straight year, the report showed.

While Southern African private-capital firms recorded 52 exits last year, matching the number in 2024, proceeds climbed 19% to R20.3 billion.

Trade sales were the most common exit route, rising to 27 from 15 a year earlier and generating R5.8 billion in proceeds.