South African Buyout Firm Ethos Planning Alexander Forbes Exit

Ethos Private Equity Ltd., South Africa’s oldest buyout firm, is readying the sale of its stake in retirement-fund administrator Alexander Forbes Ltd.

“We are gearing up for the Alex Forbes exit,” Ngalaah Chuphi, a partner at Ethos, said in a Johannesburg interview. “We have done over 100 deals and exited 87 of them for cash.”

Alex Forbes, Africa’s largest such administrator, was acquired for 8.2 billion rand ($806 million) in 2007 by a group of investors including Ethos and Actis LLP. The deal was one of the investments made by Ethos’ Fund V, which closed in 2006 and was worth 5.5 billion rand. The fund has nine investments to exit including resources company Idwala Industrial Holdings Ltd.

“We’ve seen a lot of inbound interest from international companies,” Stuart MacKenzie, another Ethos partner in the Aug. 16 interview, said of interest in the Fund V investments.

Alex Forbes said in June it had hired Deutsche Bank AG and Rand Merchant Bank to advise on a potential initial public offering. Ethos is also hunting for new deals with fund VI, worth $800 million, having closed in January.

“We will do 10 to 12 deals on fund VI,” Chuphi said. “Fund VI can do 20 percent direct into Africa. We want to deploy $25 million to $40 million per deal.”

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