Creating legacies through inspired investing
An Inspired Initiative
Established in 2007 as one of the KwaZulu-Natal (KZN) provincial government’s key strategic initiatives to accelerate Broad-Based Black Economic Empowerment (B-BBEE), job creation and economic growth in the Province, KZN Growth Fund (KGFT) was structured as a unique publicprivate partnership venture to finance medium to large private sector projects. This unique initiative focuses on catalytic investments and economic sectors as dictated by its mandate and investment policy. In the past seven years, KGFT has committed and disbursed almost R1 billion to ten projects in the healthcare, manufacturing, telecommunication and logistics sectors and has created over 14,000 job opportunities. The KGFT is further currently appraising various potential investment leads that has the potential to create a further 20,000 job opportunities.
Inspired Growth
In line with its strategy to further grow its asset base and increase its positive impact on job creation and B-BBEE as well as reduce social and economic inequalities, KGFT is setting up a limited liability Equity Fund Partnership to manage third-party funds. This is the first provincial governmentled initiative, through one of its entities, to establish a fund of this nature that uniquely possesses a developmental impact. KGFT embarked on an extensive fund-raising exercise during the financial year, to raise an additional R700m that will see its equity fund capitalised to the tune of R1 billion (currently R300 million).
Inspired Investing
KGFT’s Equity Fund has the potential to unlock more than R3 billion of investments with the commercial banks providing the required debt financing. The organisation is constantly striving to forge a better future in which businesses are more profitable, people are employed and the economy grows.
KGFT has revised its investment policy to better align and deliver on the national imperative of radical economic transformation that seeks to fundamentally change the structure of the South African economy. Going forward, as an entity of government, we have placed reindustrialisation at the apex of our list of priorities to grow the economy and create employment. This, in our view, entails a robust shift to an economy that will benefit all including the marginalised groups of the society such as youth, women, and people with disabilities.
The key features of the KGFT’s current portfolio of projects evidences the Fund’s commitment to addressing the challenges of industrialisation, increasing local content, value addition or beneficiation, infrastructure development, skills development and entrepreneurship development. Currently, the organisation boasts a very attractive pipeline of projects throughout the Province that are undergoing initial appraisal and detailed due diligence, some of which will be disbursed soon.
The recipients of the KGFT’s lending and investing practices benefit two-fold. Firstly, through the sharing of the risk of starting a new business with the KGFT and secondly, they in turn have created a more sustainable socio-economic environment in which to operate in. This is done by the inclusion of designated groups, job creation and stimulating economic activity. The KGFT can proudly state its involvement in truly national companies contributed significantly to the GDP of South Africa when those entities were just starting out in need of funding.