JSE private placing platform attracts more than R5bn in investments | Fin24

In just three months after the JSE received a licence to open a platform for private market capital raising, it has attracted more than R5 billion in potential investments.

The online platform allows private investors to buy stakes or bonds in specific projects.

Investors approach JSE Private Placements (JPP), specifying what kind of deals they are looking for and the amount of money they are willing to invest. They can choose from a range of potential deals, and can then buy stakes in projects via the JPP platform.

On Thursday night, the JPP platform brokered its first deal for a private hospital in Musina on the border of South Africa and Zimbabwe.

It will be a 50-bed private hospital with a 24-hour emergency care unit, paediatric units, a maternity ward as well as medical and surgical wards. The project will cost about R150 million. The Industrial Development Corporation (IDC) and the Development Bank of Southern Africa (DBSA) have already committed debt funding, but the project still needs about R70 million of equity funding.

“I think this is something that we as entrepreneurs have been longing for, for the longest time. The development finance institutions, the DBSAs, the IDCs are always willing to provide funding. However, it’s always an issue to raise the capital finance,” said the property developing engineer who designed the hospital, Mpho Khorombi.

In December 2021, JSE Private Placements received a licence to raise private capital in both equity and debt. The new JSE subsidiary targets both listed and unlisted private equity firms, venture capital funds and private debt issuers.

The JSE offers the platform in association with Globacap, a UK-based capital markets technology company in which the JSE owns a minority stake.

Speaking at the official launch event of JPP, CEO Leila Fourie said she was amazed by the response from investors.

Big money available for projects

“We have investors of over R5 billion on the platform, and we’ve only just begun. This is the start of something special, not just for us, here in South Africa, but beyond and into the continent,” said Fourie.

Sam Mokorosi, the head of origination and deals at JSE, said the R5 billion of capital is now waiting for private equity, private debt and infrastructure deals, among other things.

Mokorosi says another deal that will likely be confirmed in the next month involves a renewable energy project representing 1.1 MW of power. That deal is seeking about R160 million in investments.

A student housing project transaction is also in the pipeline, as well as a venture capital fund and another renewable energy project. Collectively, they are looking to raise approximately R2 billion.

“For the future, we are very excited to be exploring the rest of the continent. We already have people from the DRC and Kenya asking us [whether they] can use the platform to raise capital. We’re really excited about the opportunity to scale up,” said Mokorosi.

Globacap CEO Myles Milston said there are pools of capital looking for good deals globally, which can potentially find a home in Africa through the JPP.

“I believe that Africa is about to embark on a multi-decade tremendous growth trajectory,” said Milston. “There is an immense pool of capital globally and a growing pool of projects in Africa that are underfunded. Clearly, that’s a good match,” he added.