South African investment managers look after R629.7bn in private debt and private equity strategies, according to a new report by financial services group 27four.
The Investment Management South Africa 2026 report is based on a survey of 102 investment managers. Together they reported R8.38 trillion in assets under management.
Private debt makes up R391.6bn of the private capital total, while private equity makes up R238.1bn, the report said. That means private markets hold nearly 8% of all the money the managers reported.
Private debt is the bigger of the two, with about 62% of the combined amount. It accounts for 4.7% of all surveyed assets, compared with 2.9% for private equity.
The two work in different ways. Private equity usually means buying a share in a business. Private debt is a loan that must be paid back, and it gives companies a way to borrow outside the banks.
The report found that private debt is held by only a few big players. The four largest funds hold about 90% of the money in the detailed analysis, and the biggest fund alone holds about 52%.
Eighty percent of the lenders said established small and mid-sized businesses were their main borrowers. Only 15% said their average loan was below R15m.
According to the report, this money pays for business growth, company buyouts, infrastructure and refinancing. It is mostly not aimed at start-ups or very small businesses.
Most of the lending stays at home. Managers said they put an average of 89% of private debt into South Africa, 10% into the rest of Africa and 1% into global markets.
On the equity side, infrastructure holds 49% of the assets but only 35% of managers invest in it. Traditional private equity holds 30% of assets, and 62% of managers invest in it.
The managers in the survey also differ a lot in size. More than two in five manage less than R1bn, while 15% look after more than R10bn. The middle manager runs R1.7bn, but the average is R7.5bn.
The report found that foreign investors now play a much bigger part in raising money for private equity funds. Before 2010, they made up just 4% of fund commitments.
For funds raised between 2021 and 2026, the foreign share climbed to 39%. In infrastructure, foreign investors gave 49% of recent commitments.
In traditional private equity, foreign commitments grew from 0.2% before 2010 to 36% in the latest period. That means foreign investors now give nearly R4 of every R10 put into these funds.
Local retirement funds put very little into private equity. The report cited Financial Sector Conduct Authority data showing retirement funds held R3.65 trillion in assets in 2024.
Only 0.8% of that money went into private equity funds. The rules allow retirement funds to put up to 15% into this type of investment.
The report said private equity and infrastructure need special skills in valuing assets, fund structures and long investment periods. It said trustees must weigh this against their duty to protect members’ savings.
The report includes the 27four DEI Index. Its private market figures count both invested money and promised money that has not yet been drawn.
Source: this article is based on reporting by Business Day. Image: Business Day. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.