By SAVCA
Southern Africa’s private capital industry is showing renewed confidence, with new survey findings revealing a significant uptick in fundraising led by South African institutional investors and increased exit proceeds, despite slower investment activity.
The SAVCA Private Capital Industry Survey 2026, compiled in association with research partner EY-Parthenon, examines fundraising, investment, exits, funds under management and portfolio performance during 2025, alongside transformation, ESG, strategic priorities and expectations. The research draws on responses from 51 private capital firms operating in Southern Africa and seven South African-based allocators.
Speaking at the recent survey launch, Anusha Naidu, SAVCA’s CEO, said: “This year, we have made a more concerted effort to reflect the full private capital continuum (except for venture capital as it is reported in a separate survey), aligning with our SAVCA expanded mandate. We have also continued to build on allocators’ perspectives, strengthening the research by providing an investor lens alongside fund manager sentiment, highlighting where expectations, priorities and future capital allocation align or diverge. We’d like to thank our SAVCA members, the funds and allocators that contributed openly and honestly to the research, and our research partner EY-Parthenon for this important barometer of our industry, helping to inform decision making.”
Fundraising rebounds as South African investors increase commitments
Fundraising increased substantially from R8.4 billion in 2024 to R22.0 billion ($1.3 billion) in 2025, the second-highest recorded in the past decade, with South African investors accounting for 55% of funds raised in 2025. The number of private capital firms raising capital also increased from 13 in 2024 to 18 in 2025, despite the global fundraising decline.
Among disclosed investor categories, South African pension and endowment funds were the largest source of capital, with contributions increasing from R1.6 billion in 2024 to R4.4 billion ($267 million) in 2025, an increase of 175%. “Particularly encouraging is the increased allocation by pension and endowment funds, reflecting continued local investor confidence in the asset class and the opportunities available across the region,” Naidu says.
Infrastructure, energy and related funds’ share of capital raised decreased from 71% in 2024 to 62%; generalists increased their share from 22% to 33%. Recycled disposal proceeds, which are money generated from selling investments and then reinvested in the asset class, contributed R4.3 billion ($261 million), reinforcing the role of distributions in supporting renewed commitments. Firms with more than R10 billion ($606 million) under management attracted 51% of funds raised during the period.
Investment moderates as firms become more selective
Total investment value declined from R26.6 billion in 2024 to R22.4 billion ($1.4 billion) in 2025, a decrease of 16%, but remained above the survey’s reported ten-year average of R21.7 billion. The total number of investments, excluding Business Partners, fell from 228 to 186, which reflects a decrease of 18%. The value of new investments decreased by 22% from R19.7 billion to R15.3 billion ($927 million), and follow-ons, which are additional investments made into companies that a fund has previously invested in, increased from R6.9 billion to R7.1 billion ($430 million), with their share of investment value increasing from 26% to 32%.
Energy, real estate and infrastructure represented approximately 40% of total investment value during the period, with the portion invested into the education sector increasing from 2% in 2024 to approximately 16%. However, this increase has been primarily driven by one fund manager’s deployment rather than a broad-based market increase.
Investment into the energy sector increased from 13% in 2024 to approximately 20%, while investment into real estate increased from 6% in 2024 to 11%. Investment into infrastructure decreased from 27% to 9%, and expansion and development capital remained the largest investment stage at 49%, while buyouts increased from 20% to 38%.
“We are increasingly seeing capital going into infrastructure, renewables, real estate and education – sectors where it can have a tangible impact on the economy and broader society,” says Graham Stokoe, Partner, EY-Parthenon.
Transformation, ESG and technology
Transformation across ownership and management advanced, although gender progress remained mixed. The lack of quality ESG data remained one of the most significant barriers to ESG progress. Firms reporting a “very positive” ESG impact on exit financial results increased from 5% to 15%. The proportion of firms identifying technology transformation as a top priority also increased from 11% in the previous survey to 40%.
The proportion of firms reporting dedicated ESG personnel decreased from 64% to 54%. The proportion citing lack of quality data as the main barrier to portfolio-company ESG progress increased from 42% in the previous survey to 44%.
Portfolio growth remains resilient, but performance diverges
Over 2023–2025, 70% of 261 portfolio companies expanded their workforce; growing companies recorded weighted average compound annual growth of 16%. However, 30% of portfolio companies experienced a reduction in employment, which could be attributed to the challenging economic conditions, a sentiment that was also confirmed in the panel discussion during the launch event at EY for the survey.
Among the 196 portfolio companies analysed for revenue over 2023–2025, 56% recorded revenue compound annual growth above 5%, while 26% recorded declining revenue. Of the sample of 174 companies analysed for EBITDA, 55% achieved compound annual growth above 5%, while 37% recorded declining EBITDA. This shows the diverging experience across portfolio companies and the need for private capital firms to explore various levers to improve the performance of portfolio companies in preparing them for an exit in the coming years.
Exit proceeds strengthen as trade buyers return
Exit proceeds increased from R17.1 billion in 2024 to R20.3 billion ($1.2 billion) in 2025, a rise of 19%. Recorded exits remained at 52. Trade sales increased from 15 to 27, generating R5.8 billion ($352 million), while sales to private capital firms or financial institutions fell from 19 to 5. Infrastructure and energy funds’ share of proceeds from exits increased from below 20% in each of the preceding three years to 52% in 2025.
Where costs and proceeds were disclosed, the proceeds-to-cost ratio improved from 1.5 to 1.6 times. Write-offs increased from eight to nine, underscoring continuing pressures across parts of the portfolio. Public-market activity included one IPO and one sale of listed shares.
“We have seen four years of solid exit proceeds being returned to investors. That capital recycling reflects the resilience of the industry, although write-offs, which increased from eight in the previous survey to nine, do remain a concern, as they highlight the operating and valuation pressures that persist across parts of the ecosystem,” says Stokoe.
Confidence builds for the road ahead
Despite geopolitical and technology risks, the proportion of responding firms expecting accelerated or moderate improvement in funds under management over three years increased from 79% in the previous survey to 88%. Allocators remain more measured: 71% expect moderate growth and 29% unchanged funds under management.
The firms’ outlook comprises 46% expecting accelerated growth and 42% moderate growth. On industry fundraising in 2026, 57% of allocators expect an increase, compared with 40% of firms. Funds under management (FUM) fell from R233.3 billion in 2024 to R226.4 billion ($13.7 billion) at year-end 2025, a decrease of approximately 3%. Rand appreciation, however, produced approximately 11% growth in USD terms. Undrawn commitments fell from R48.7 billion to R45.4 billion ($2.8 billion), a decrease of 7%; however, they were still approximately twice annual investment value and thus still sufficient capital for firms to continue making new and follow-on investments.
“The opportunity before us is clear: we need to translate confidence into action and ensure that private capital continues to play a central role in building a more competitive, inclusive and prosperous economy,” Naidu concludes.