Business Partners, Leading Investor in SMEs, SACCI Convention 2013

Business Partners

Leading Investor in SMEs

David Morobe, Regional General Manager

SACCI Convention 2013

Economic trends & discontinuities

Global

Africa - booming economies; is the 21st century the dawn of Africa era?

South Africa:

• fragile recovery from the 2008 GFC and 2009 recession
• vulnerable to European economic malaise and slow growth in North America (which, together accounts for >50% of SA exports)

Overview of the SA SME market

1.5 - 2 million SME and SMMEs operate in South Africa

Confidence level: 35% extremely confident

Business Partners is a specialist investment group, providing finance and mentorship for small and medium enterprises in South Africa. Now growing to English speaking parts of the continent

A risk financier, founded in 1981 by Anton Rupert

31 offices around the country

300 to 600 investments per annum in SA

Offers:

Financing

Mentorship

Property finance and management

Manage funds

69,000 businesses financed

R12.5bn rotated

R1bn finance available

The target market:

Mainly family owned, SME

E.g. Wimpy franchises, manufacturing plant

Procedures we follow:

• work in small teams
• Do proper due diligence
• Prepare an approval report
• Committee decision
• Implementation follow
• Post investment action

Viability based financing:

Focus on business

Entrepreneurial ability

Business Partners Venture Fund (R400 million)

Early stage investments, after research

investment period: normally 5 years

Exit strategy: preferably trade sale

Buying vs renting:

Decide to buy own premises

Normal bank principals

Entrepreneur has no deposit

can lose opportunity

Normally bank will require 30% deposit, Business Partners fund 100% of building. By year 4 to 5 break even

Investment capital of between R500,000 and R25million

George, lab doing tests for foodstuffs

Property investments: R787 million with 2,000 tenants

Graduate internship program

Schools entrepreneurship program

SME Tool kit

Business Mechanics and home website

Deal generation:

accountants, bankers, brokers, consultants, attorneys, agents as intermediaries 54.5%

Existing clients 36.3%

Marketing action 9.2%

What makes us different?

The approach

Personal contact

Funding flexibility