Ethos hits fundraising trail with revised target

The South African firm hopes to raise as much for Fund VI as its $750m predecessor.

Ethos Private Equity has started fundraising for its sixth buyout fund.

A spokeswoman for the firm declined to name a target size for the fund, but confirmed it would aim for a similar size to its $750 million 2006 vehicle.

In early 2008 Ethos indicated it planned to raise a $1.5 billion vehicle, double the size of Fund V. In light of the escalation of the global financial crisis that struck during the second half of the year, the firm delayed and revised fundraising plans.

Fund V is nearing full investment, Ngalaah Chuphi told sister magazine Private Equity International. “We still have capacity in the current fund to do one or two more deals depending on the size,” he said.

Ethos Fund VI will invest predominantly in South Africa, making some investments in the rest of Sub-Saharan Africa.

Chuphi said Fund VI had received some positive responses from certain South African investors.

“I think it is a tough fundraising environment, without a doubt,” said Chuphi. “Hopefully things will open up as the recovery of the global economy takes shape.”

Africa-focused funds have recently had a tough time attracting institutional money, according to David Hutchings, head of private equity for Albourne Partners, which advises institutional investors on their private equity fund selections.

“Despite having had one really interesting and well sponsored offering in front of clients for some months, there has been no appetite,” Hutchings said. “Largely this is because there is such a good array of credit and distressed opportunities available in the US and Europe that it just has not been attractive to take the extra risk.”