“We decided to join forces because we wanted to create a business where we could put the expertise that we had learnt in our banking environment to full use. We wanted an arena where deal sourcing, deal structuring, debt and capital raising and acting in an advisory capacity to clients who wanted to dispose of their businesses was our main focus.”
— Hale Matsipa, Kleoss Capital’s CEO
The extent to which debt counselling has become a mainstream industry became evident this week when private equity firm Kleoss Capital announced that they had bought a stake in one of the largest debt counselling firms in South Africa, Debt Rescue.
Debt Rescue CEO Neil Roets said that after almost a year of negotiations, Kleoss Capital decided to come on board bringing with them a wealth of expertise and experience in the private equity field.
“We are delighted to have Kleoss Capital on board. We were impressed by their methodological approach to investing and thoroughness during the due diligence phase. We look forward to the strategic partnership and the invaluable inputs Kleoss Capital will be able to make in our already strong management team.”
Roets said their primary reason for selling a share of the business to Kleoss Capital was that Debt Rescue had reached the point where it was ready to spread its wings to bigger and better things.
“We have twice been voted the best debt counselling firm in South Africa by both the public and by the major role players in our industry which included the major banks.”
“By having Kleoss Capital on board, we have access to the brightest and the best minds who have the ability to assist us to build on our success and take the business to the next level. Kleoss Capital is also a 100% black owned and managed investment manager.”
Roets said Kleoss Capital approached them because they considered Debt Rescue a leader in their field and was of the view that the company offered significant growth potential.
Hale Matsipa together with Andile Keta and private equity practitioner, Zain Laher founded Kleoss Capital, a R1.2 billion growth equity fund, in 2014.
“We decided to join forces because we wanted to create a business where we could put the expertise that we had learnt in our banking environment to full use.
“We wanted an arena where deal sourcing, deal structuring, debt and capital raising and acting in an advisory capacity to clients who wanted to dispose of their businesses was our main focus.
“We were confident that we had the requisite skills and the experience to raise sufficient capital to get an investment business up and running by bringing our expertise to the table to grow whatever businesses we chose to invest in to create value for our investors.”
Matsipa said their ambition was for Kleoss Capital to be a multi-class investment manager in the alternative space.
“We look at a wide range of attributes such as the value of the companies, how much capital they need and what they plan to do with it to grow the business.
“We look at their transformation credentials and see how best we can help them to add value and ultimately sell it for a healthy profit.”
Explaining how they decided on which companies to invest in, Matsipa said the first thing they looked at was whether they could get a healthy return on their investment.
He said his company would work closely with the management team at Debt Rescue on a value-add basis.
“We believe Debt Rescue has a bright future and is ready for the next phase of its corporate life where we see the business growing to generate solid returns for our investors. We believe that in Debt Rescue we have a solid platform for improving the lives of the millions of over indebted South Africans. “
Source: LiquidAfrica, March, 17, 2017