The debate about private markets in South Africa often begins with a comparison: Local pension funds allocate a small amount of capital to private markets compared to their global counterparts. But focusing on what domestic private markets are not doing can obscure their history and what they could yet be.
The history of private markets in South Africa runs parallel to the country’s political and economic transition. The modern private equity industry emerged in the 1980s through leveraged buyouts, a model that was inspired by and pioneered by Kohlberg Kravis Robert (KKR) in the 1970s.
The critical driver of private markets in South Africa was disinvestment from the country by United States (US) and United Kingdom multinational corporations in the 1980s as pressure on political and business leaders mounted for them to take a stand against the Apartheid regime and enact economic sanctions.
This created a pipeline of quality businesses available for acquisition. Often, the US or European multinationals would allow the management teams to look for buyers and try to source capital if they wanted to lead the buyout, and from that period emerged firms such as Ethos Private Equity and Capital Partners (which later became Brait), anchoring the local buyout market.
The first landmark buyout deal, concluded in 1984, was the acquisition of Hudaco Industries from Blue Circle, which was led by private equity pioneer and founding partner of Ethos Private Equity, Andre Roux.
Post-1994
The second phase was shaped less by global capital markets and more by domestic policy. After 1994, the government transformation imperative to redress the economic exclusion of Black (Black, Coloured and Indian) people under apartheid became the defining driver of deal activity. At the same time, South Africa was reintegrated into global capital markets following the end of sanctions, reopening access to international investors and aligning local financial structures more closely with global norms.
This transformation objective, manifested through Black Economic Empowerment and later refined into Broad-Based Black Economic Empowerment, created both new private equity opportunities and new financing needs.
Ownership restructuring required capital solutions that traditional bank lenders were not always willing or able to provide, particularly at the riskier end of transactions. Private equity stepped into that space.
As the private markets landscape formalised in the late 1990s and early 2000s and as South Africa’s institutional investor base matured alongside the post-1994 regulatory framework, it became clear that unlisted investing required dedicated structures rather than being housed within traditional balanced mandates.
Private markets today and tomorrow
South Africa’s constraints in logistics, energy, and transport are well documented, and long-term infrastructure assets generate predictable cash flows that align with pension liabilities while addressing structural bottlenecks in the economy. When properly structured, these investments deliver both commercial returns and national benefits.
Australia provides a case study of how an infrastructure asset class can be built at scale. In the 1990s and early 2000s, state governments responded to fiscal pressure by monetising electricity networks, airports, and toll roads. They brought assets to market, competed for institutional capital, and established pricing and governance benchmarks. At the same time, compulsory superannuation drove significant stable savings pools into institutional investors. Long-term pension capital met long-duration infrastructure assets, creating a virtuous circle.