South African black-owned asset manager ARC Investments aims to grow into a fund of up to R25 billion ($2 billion), one of its co-chief executives said on Thursday after listing on the Johannesburg stock market.
ARC is operating in something of an investment sweetspot, with South African law and industry codes requiring companies to boost shareholding by black investors as part of government efforts to increase black involvement in the economy.
ARC Investments was founded by mining tycoon Patrice Motsepe, considered South Africa’s first black billionaire, and two of financial services group Sanlam’s former executives, Johan van Zyl and Johan van der Merwe.
“We would like to grow the fund to R20 billion to R25 billion,” co-chief executive Van Zyl told Reuters.
The company has already completed about 40 investments for about R6 billion as a black empowerment shareholder in the past 18 months and has a further R2 billion to R2.5 billion available, he added.
That money can go a long way because black empowerment partners have the ability to negotiate discounts and financing deals before they invest, Van Zyl said.
“For empowerment there is a lot of money available to do financing, to be clever, and this is a big part of the skills we have,” he said.
ARC opened at 868 cents per share on Thursday, after the initial public offering was oversubscribed at 850 cents, raising around R8 billion. By 1227 GMT the shares were trading at 845 cents.