Our Investment Approach

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  • Investment Approach
Our investment objective is to achieve above average financial returns underpinned by ZKR Capital following a disciplined approach to investing within the parameters of certain sectors, size and financial criteria which is recorded in our investment mandate as follows:
Sector
Focus
Our priority sectors for investment are as follows:
  • • Manufacturing
  • • Information, Communications and Telecoms
  • • Education
  • • Healthcare
  • • FMCG
  • • Business services
  • • Renewable energy



    • Sector focus
    exclusions
    We will not pursue companies operating in the following sectors:
  • • Alcohol
  • • Tobacco
  • • Arms
  • • Primary mining (excluding mining services)
  • • Primary agriculture (excluding agro-processing and support services)
  • • Sex
  • • Construction
  • • Property
    • Financial
    requirements
    The portfolio company should demonstrate the following fundamentals:
  • • At least three-year track record of profits
  • • Revenue of at least R200 million
  • • EBITDA of at least R15 million
  • • Low gearing
  • • Strong cash flow generation






    • Portfolio
    company
    Medium sized companies fulfilling the following requirements:
  • • Competitive market position
  • • High growth potential
  • • Robust cash flows
  • • Strong history of profitability
  • • Experienced management team
  • • No reputational risk either past or present
  • • Operating mostly in South Africa
  • • Minimum and maximum equity cheque contributed by ZKR Capital is R15 million and R25 million
  • • Minimum equity interest owned by ZKR Capital is 25% and maximum 49% unless co-invested with another private equity fund where together both parties can exercise reserved matters
    • Our investments undertaken with a portfolio company must take the form of either one or more of the following requirements:


    Black Economic Empowerment
  • • Introduction of or replacement of a Black Economic Empowerment investor

    • Buyouts
  • • Partnering with management on a management buyout transaction
  • • Partnering with other private equity and investment holding companies on a leveraged buyout transaction
  • • Providing replacement capital to exit existing shareholders

    • Management buy-in’s
  • • Co-investing with experienced entrepreneurs to buy into a business where they can add demonstrable value or provide a competitive edge

    • Expansion/growth capital
  • • Portfolio company is seeking a capital injection to fund capital expansion programme, an acquisition or enter into new markets