INVESTMENT CRITERIA

Greystone invests in a wide variety of transaction types and sizes.  

Our private equity investment criteria include the following:

  • Transaction types: Significant minority shareholding of between 5% and 50%
  • Transaction sizes: Minimum of E10 million to a maximum of E50 million
  • Geographic preference: Greystone predominant focus is on making investments in Swaziland and selectively in Common Monetary Area Countries (South Africa, Lesotho and Namibia)
  • Sector preference: Greystone has no sector preference.

Investment Process

The investment process is summarized in the diagram below:

 i.        Deal Sourcing:

The first step in the investment process consists of identifying potential opportunities and completing a basic initial screening. Preliminary discussions are held with potential investee company shareholders/management.

ii.        High Level Assessment:

Should the PE Team be of the view that an attractive investment opportunity may exist, a “Screening Investment Paper” is presented to the Deal Forum for consideration. This document contains amongst others the following: key background information on the company and the sector, historic financial information and high level financial projections, the potential transaction being discussed and projected returns, key attractions and key risks.

iii.        Detailed Assessment:

Should the Deal Forum provide its approval to proceed, a non-binding termsheet is presented to the company/sponsors and the PE Team attempts to secure an exclusivity period to complete its detailed due diligence of the opportunity, including commercial, financial and legal due diligence.

iv.        Formal Approval:

Following the detailed due diligence, a detailed Investment Memorandum is presented to the Investment Committee for approval. This document contains amongst others the following: 

  1. Detailed information on the company
  2. Market outlook and competitive landscape
  3. Detailed historic financial analysis
  4. Detailed financial projections
  5. Risks analysis
  6. Opportunity analysis
  7. Detailed transaction structure and potential returns
  8. Environmental, Social and Governance (“ESG”) review
  9. Post deal investment management strategy and exit strategy

v.        Execution:

After final approval has been granted, the investment is negotiated with the shareholders and/or the management team of the investee company. Once terms have been reached, the investment is executed which typically requires entering into all requisite legal agreements, obtaining all necessary regulatory and statutory approvals that may be required.

vi.        Portfolio Management and Exit

The Manager has a strong value-add focus as it is of the opinion that a big part of private equity value creation comes from driving business improvements in portfolio companies.  The African Alliance PE Team aims to provide significant value-add to the portfolio companies by:

  • Constituting the board and its sub-committees according to international best practices of corporate governance.
  • Active involvement on the board and sub-committees.
  • Frequently interacting with management, providing input on how to improve effectiveness of interventions.
  • Assisting with strategic growth and innovation initiatives.
  • Identifying technical partners for growth initiatives.
  • Ensuring adequate staffing and personnel management.
  • Assisting in negotiating agreements with customers.
  • Optimising the capital structure and fundraising initiatives.
  • Developing environmental, social and corporate governance, also known as ESG, to measure the sustainability and ethical impact of companies.