Franklin D. Roosevelt once said, “A smooth sea never made a skilled sailor.”
This is certainly encouraging for us, as we deal with the choppy waters which include geopolitical risk, economic volatility, and South Africa’s skills challenges. We are well on our way to becoming master mariners.
I’ve found it particularly interesting to see how all markets, both local and international, have retracted and begun focusing more on more of a look local attitude. It’s encouraging to see more application to our local economy, and I believe there are more opportunities for us here at home.
That being said, there are difficulties that must be carefully, tactically, and tactfully managed. Not least of which is mitigating risk! How to manage this is something we are still navigating, and as a private equity firm we have both direct and indirect exposure to lead and govern. It is ongoing, and I believe that our team at Agile and our portfolio companies are up to it. We’ve also seen a rise in capital looking for good assets due to various factors, but as always, our take is one of cautious optimism and selective when we look at assets. Ensuring that we do all our due diligence, discuss honestly and transparently our concerns and the opportunities that we see within our current businesses and those that we have an interest in investing in. We look for long-term commitments – 10 years and more – and always commit ongoing support in navigating challenges
Interestingly, there have been a number of assets coming to market; however, the execution of transactions is challenging and often takes much longer, often due to a value disconnect. I’d encourage you to look at the article on our website by our associate, Ndima Marutha, for a deeper dive into this topic.
Eyes on Opportunities
I believe that education, healthcare, technology, and the services sectors still have opportunities for local investors. In terms of education, we believe there are opportunities to invest in businesses that are able to provide quality services that are scalable, particularly in the trade and artisan space.
The healthcare industry continues to present unique and niche opportunities. Healthcare is a big topic, as there is a desperate need to make healthcare openly accessible to everyone. Services continues to be a resilient sector in South Africa, and steady, scalable growth is something that remains attractive in any market.
Private Equity Opportunities
Agile Capital has worked with successful entrepreneurs and family businesses implementing MBOs. Management Buyout opportunities can occur in a number of ways, from retiring owners, selling the company to key managers, to an option to access funds for growth, as well as adding reputable BEE partners. Additionally, it presents an opportunity to team up with skilled and experienced professionals, an important resource for any business.
This may even be something that you’ll only be looking at in the next year or two, but it may be worthwhile to speak to one of the Principals at Agile – we have vast knowledge, expertise and are sector agnostic. Planning ahead is a prudent and healthy business strategy – one which we actively encourage.
Regards,
Tshego
