Beyond the JSE: Inside South Africa’s R630bn private capital market

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Financial services group 27four’s Investment Management South Africa 2026 report — based on a survey of 102 investment managers* — shows R391.6bn in private debt strategies and R238.1bn in private equity strategies.

Together, these represent R629.7bn in assets under management, equivalent to nearly 8% of the R8.38-trillion reported by survey respondents.

Notably, private debt accounts for approximately 62% of this combined total, making it substantially larger than private equity.

Source: 27four’s ‘Investment Management South Africa 2026’ report. Both provide capital outside traditional listed markets, but their investment models, borrowers and sources of funding vary.

Private debt strategies account for 4.7% of total surveyed assets, compared with 2.9% in private equity strategies.

The distinction matters. Private equity generally involves acquiring an ownership stake in a business. Private credit provides financing that must be repaid, giving businesses access to capital outside conventional banking channels.

27four’s report also reveals significant concentration within private credit. In its detailed analysis of fund exposures, the four largest funds account for approximately 90% of the total examined, with the largest alone representing about 52%.

This points to a market where a handful of large lending platforms operate alongside smaller, specialist private-credit managers.

The borrower profile is revealing. Eighty percent of managers in the detailed analysis identify established small and mid-sized businesses as their primary borrowers, yet only 15% report average loan sizes below R15m.

This is principally institutional lending to established businesses, rather than small-ticket lending to start-ups or micro-enterprises.

The financing supports business expansion, acquisitions, infrastructure investment and refinancing.

Source: 27four’s ‘Investment Management South Africa 2026’ report. Geographically, private credit is overwhelmingly domestic. Managers report an average allocation of 89% to South Africa, 10% elsewhere in Africa and just 1% to global markets.

Private credit’s strong domestic focus means that its performance is closely linked to the health of the South African economy, particularly the ability of local businesses to generate cash flow, service debt and repay their loans.

Private equity presents a different picture.

Infrastructure equity accounts for 49% of assets but is pursued by only 35% of managers. In contrast, traditional private equity accounts for 30% of assets but is pursued by 62% of managers.

Source: 27four’s ‘Investment Management South Africa 2026’ report. The contrast is significant: infrastructure commands the largest share of capital, while traditional private equity attracts the greatest number of managers.

Infrastructure investments generally require larger commitments over longer periods. Traditional private equity spans a broader range of businesses and transaction sizes, including the mid-market.

The size of participating managers also varies substantially. More than two-fifths manage less than R1bn, while 15% oversee more than R10bn. The median manager has R1.7bn under management, compared with an average of R7.5bn.

This difference reveals an industry comprising many relatively small firms alongside a limited number of substantially larger investment platforms.

One of the report’s most striking findings is the growing contribution of offshore investors to private-equity fundraising.

Before 2010, foreign investors accounted for just 4% of fund commitments. For funds raised between 2021 and 2026, that share increased to 39%.

Source: 27four’s ‘Investment Management South Africa 2026’ report. The shift is particularly pronounced in infrastructure, where offshore investors account for 49% of recent commitments.

Traditional private equity has experienced a similar change, with foreign commitments increasing from 0.2% before 2010 to 36% in the latest period.

Foreign investors now provide nearly R4 in every R10 committed to private-equity funds in the report’s latest fundraising period, and almost half of infrastructure commitments.

South Africa faces a substantial infrastructure financing gap, yet one of its largest pools of long-term capital remains minimally invested in private equity.

According to Financial Sector Conduct Authority data cited in the report, retirement funds held R3.65-trillion in assets in 2024, with just 0.8% allocated to private-equity funds, against a regulatory ceiling of 15%.

The disparity raises an important question: are retirement fund trustees and their advisers adequately equipped to assess private-market opportunities, or are concerns about risk, liquidity and complexity discouraging investment?

Private equity and infrastructure investments require specialist expertise in valuations, fund structures, long investment horizons and the realisation of returns. Trustees must weigh these considerations against their fiduciary duty to protect members’ retirement savings.

The tension is significant. South Africa urgently needs capital for infrastructure and productive investment, but retirement funds cannot be expected to finance development at the expense of appropriate risk-adjusted returns.

The priority is not to push trustees towards higher allocations, but to strengthen their ability to evaluate private-market investments. Better investment knowledge, sound governance and access to credible opportunities could help unlock long-term capital without compromising the interests of retirement fund members.

The growth of private markets creates an opportunity to rethink how South Africa finances its economy. But expanding the industry is not, in itself, an economic achievement.

The distinction lies in what the capital enables: businesses that can expand, infrastructure that improves productivity, and investments that generate sustainable returns.

This requires more than willing investors. It requires viable projects, credible managers, disciplined investment decisions and the ability to turn long-term commitments into measurable outcomes.

Private capital cannot substitute for the reforms needed to make South Africa investable. But where those conditions exist, it can help turn economic potential into productive assets.

Ultimately, the success of private markets should be measured not only by assets under management, but by the value created for investors, businesses and the wider economy.

Download the full ‘Investment Management South Africa 2026′ report from the 27four website.

*About the research: The ‘Investment Management South Africa 2026′ report incorporates the 27four DEI Index. The survey covers 102 participating investment managers reporting R8.38-trillion in assets under management. The R391.6bn private-debt and R238.1bn private-equity figures are drawn from the survey’s overall asset-allocation data. Private-market reporting includes invested capital and uncalled commitments. Figures describing manager concentration, borrowers, fundraising and investment practices are drawn from the relevant detailed respondent samples and do not necessarily cover every manager contributing to the overall totals.