US equity firm Sassoon approves R692bn for possible investment in SA

US equity firm Sassoon approves R692bn for possible investment in SA


CAPE TOWN – US PRIVATE and equity investment firm Sassoon Group has approved $50 billion (R692.5bn) for possible investment in South Africa over five years, chairperson David Sassoon told Business Report yesterday.

J Sassoon Group, which is more than 500 years old and is the world’s oldest independent family-owned investment firm, planned to launch a Joburg office before the end of the year, said Sassoon.

Sassoon said the group’s first investment in the country was $20 million in finance to a South African 100 percent black-owned energy start-up, Bluedrop Energy, for the construction of a stateof-the-art LPG cylinder manufacturing plant.

The $20m was the first investment that formed part of $100m private equity funding that was available to invest in emerging, entrepreneurial and innovative businesses in South Africa.

Sassoon said the group was eager to invest in new robust technology investments in the country’s transportation, infrastructure and particularly in renewable energy.

“We would like to be at the forefront of such types of investment,” he said.

He said US companies “had lost some of their footprint and market share” in Africa, and he hoped the leadership in South Africa would take notice of the group’s plans and know that the US had not left the market.

Sassoon said the group wished to invest in South Africa because it was the fastest-growing country in Africa, had the most robust and largest economy, had a stable and well-regulated financial sector and because the group wished to be in a position to be part of the social and economic development of South Africa and the continent.

He said the investment in Bluedrop Energy was the beginning, and there would hopefully be many more investments in South Africa and on the wider African continent in future,

He said the firm operated on a different private equity model than most other private equity firms.

“Private equity firms, whenever they look at new investments, the focus is generally on the exit strategy and the immediate gain they can realise.

“We are long-term investors, we typically invest for 15-30 years,” he said.

He said they invested in firms that are start-ups and entrepreneurs who often had some of the fundamentals, such as developing a business plan, that could be considered by western conventional finance houses such as Credit Suisse or Goldman Sachs.

When the group had assessed and approved an investment, it brought collective global networks of international experts to provide the emerging business owners with the elements required to bring their businesses up to international market standards.

“We work ground-up with the entrepreneurs starting with the business plan or feasibility study, and enabling them with marketing, business development and operations,” he said.

He added that two further investments in South Africa were currently being assessed, one in the medical sector and another in the technology field.

The Bluedrop Energy Plant would, in this investment, be assisted by the US-based international engineering group Fluor as well as technology partners from Israel, he said.

Export-Import Bank of the US had also issued a letter of interest providing $36m (R497m) finance guarantee in support of J Sassoon Group for this project.

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