South African black-owned and -managed impact investment management and licensed financial services provision group Summit Africa announced on Wednesday that its Summit Private Equity Fund (SPEF) II had received a $20-million (some R368.6-million) anchor investment from UK development finance and impact investment institution, British International Investment (BII). SPEF II was also launched on Wednesday and intended to raise a further R400-million to R500-million from other local and international investors, before it started investing. Its ultimate target size was R2.5-billion.

“The fund is grateful for the support and commitment received from BII,” stated SPEF II investment lead and partner Nthabiseng Thema. “This anchor investment demonstrates the strength of Summit Africa’s investment platform, our team, our fully integrated ESG and impact strategy, and our ability to work actively with portfolio companies to meet their financial and social impact objectives. This is also a vote of confidence in South Africa and the Southern Africa region as an investment destination, noting the Presidential investment drive to mobilise R2-trillion worth of investments in South Africa over the next five years.”

The SPEF II will invest in small and medium-sized enterprises (SMEs) in three sectors – financial services, information and communications technology (ICT), and food security. To meet its inclusion targets, a minimum of 15% of the fund’s investments will be aimed at directly or indirectly meeting the needs of South Africans who fall into the Living Standards Measure (LSM) 1 to LSM 6 socioeconomic categories.

“Working with impact-aligned fund managers like Summit is important to help achieve our goal to deliver development impacts at scale,” affirmed BII CEO Leslie Maasdorp. “With its proven track record for the first fund, we are delighted to anchor Summit’s second private equity fund to double down on support to SMEs in key sectors that improve the livelihoods of people in South Africa and the Southern African region.”

Regarding the financial and ICT sectors, SPEF II aims to stimulate financial and digital inclusion, job creation, diversity and transformation in South Africa and across Southern Africa.

Food security is an issue as some 33% (about 11 100 000 t) of South Africa’s food resources are wasted every year; 68% of this loss is the result of inadequate food processing, packaging, storage and distribution. SPEF II will support the development of more efficient solutions in those areas, to ensure the adequate nutrition of the country’s growing population.