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
