What is Private Equity?
Private equity involves capital investment in privately held businesses to grow their value. Institutional investors contribute funds, which are managed by skilled professionals to deliver high returns.
Private Equity Structure
- Investors (Limited Partners – LPs): Provide capital.
- Fund Managers (General Partners – GPs): Invest capital and manage portfolios.
- Investment Mandate: Defines fund objectives by geography, sector, and financial instruments.
BEE Compliance Rules for Private Equity
According to Section 3.10 of Code 100, private equity funds can count as BEE ownership if:
- 51% of Fund Managers are black-owned and staffed.
- 51% of Fund Capital is invested in 25%+ black-owned businesses (phased over eight years).
- The fund complies with annual audits to maintain its status.
Incremental Compliance Targets
| Year | % Capital Invested in Black-Owned Businesses |
|---|---|
| Year 1 | >5% |
| Year 2 | >10% |
| Year 3-4 | >20% |
| Year 5-6 | >30% |
| Year 7-8 | >40% |
| Year 9+ | >51% |
