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IFC TO INVEST IN PRIVATE EQUITY FUND IN SOUTH AFRICA


Vincent Rague
Phone: (27-11) 325-0560
Fax: (27-11) 780-5002
Amy Conran
Phone: (202) 473-9119
Fax: (202) 676-0365


WASHINGTON, D.C., Sep. 5 -- The International Finance Corporation (IFC) has signed an equity investment of up to US$20 million for 20 percent of the share capital of the South Africa Capital Growth Fund, a private equity fund which will invest in growth businesses in South Africa. An important goal of the Fund is to target projects involving previously disadvantaged groups. The South Africa Capital Growth Fund is expected to be capitalized at US$100 million. A parallel investment fund of R100 million (approximately US$28 million equivalent), the South African Private Equity Fund, has also been formed to attract South African institutional and other domestic investors. These Funds will be jointly managed by CZ Limited. "Many entrepreneurs in South Africa do not have sufficient savings to take advantage of new ownership opportunities," said Tei Mante, Director of IFC's Africa Department. "The South Africa Capital Growth Fund and the South African Private Equity Fund will provide a capital 'bridge' for new entre
preneurs to help them gain equity stakes in South African companies and expand existing businesses." Zephyr Management, Inc., a New York based investment management company, and Capital Partners Limited, a leading South African direct investment management company, will jointly own CZ Limited, the management company. CZ Limited will have an arrangement with Coordinated Management Consulting, the leading black-owned management consulting firm in South Africa, to source investment opportunities and recruit and support promising black managers in investee companies. As part of its strategy to maximize long-term investment returns, the Fund will seek to promote the participation of black South African investors and managers in portfolio companies. The Funds are part of IFC's strategy to address the severe economic inequalities in South Africa. In October 1994, IFC helped to establish the South Africa Franchise Capital Fund which makes loan and equity financing available to previously disadvantaged groups for the
acquisition of franchises. In addition, IFC has participated in the capital restructuring of African Life Assurance Company Limited, a life insurance company now controlled by a consortium representing business interests from previously disadvantaged groups. IFC, a member of the World Bank Group, is the largest multilateral source of financing for private sector projects in developing countries.