Ethos Private Equity acquired by US asset manager Rohatyn Group

US-based specialised asset management firm Rohatyn Group has acquired South Africa’s Ethos Private Equity for an undisclosed amount.

The deal, announced on Monday, is aimed at strengthening Rohatyn’s in foothold on the African content. The US investment firm’s core operations focus on providing investment solutions in emerging markets and real assets.

Rohatyn said in a statement that it had entered into a definitive agreement to acquire Ethos, one of South Africa’s leading alternative asset management companies.

It noted that the transaction (terms of which remain undisclosed) is subject to customary conditions and awaits the approval from the South African competition and exchange control authorities.

Headquartered in New York, Rohatyn’s presence is spread across 16 cities in the world, including Cairo, London and Mexico, among others.

The emerging market-focused alternative asset manager was founded by its CEO, Nicolas Rohatyn, two decades ago, growing into a firm that now manages $6 billion (R105 billion) in assets globally.

Rohatyn is made up of three business units, with the Private Markets division making up 46% of its assets under management (AuM). The Public Markets unit contributes 25% of its funds, while its Forestry & Agriculture units makes up 29% of AuM.

The deal will see Rohatyn merge with Ethos which has made more than 150 investments supporting South African and sub-Saharan businesses since 1984.

Rohatyn said it will acquire some entities owned by Ethos, while the latter’s team will be absorbed into Rohatyn. “The Ethos team will remain responsible for driving new and existing funds in South African and sub-Saharan Africa, where Rohatyn is not represented.”

“No changes will be made to the Ethos Capital board – CEO and CFO Peter Hayward-Butt and Jean-Pierre van Onselen will continue in their roles,” it noted.

Nicolas Rohatyn said the combined firm, with joint AuM of $8 billion (R140 billion), fund restructurings, and their ability to provide ‘de novo investing’, will occupy a unique position in the investing industry.

“This transaction is a strong vote of confidence in the Ethos team and signals our intention to leverage its platform to drive growth and investment in South Africa and across the continent,” noted Rohatyn.

He added that Rohatyn Group will provide the Ethos business with exposure to a new group of investors and “further align combined efforts” with local partners to strengthen the foundations of capital markets on the African continent.

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“We share a belief that multiple thematic cross-currents – such as private credit, renewable energy, digitalisation, and agriculture, among others – will anchor future investment priorities for investors,” said Rohatyn.

Stuart MacKenzie, CEO of Ethos Private Equity, said the deal is part of the company’s strategic transformation that began unfolding in 2016.

“Since then, we have successfully diversified our product offering, geographic footprint, and sources of capital.”

“This transaction represents a compelling opportunity for us to pursue the next growth phase as the African arm of the Rohatyn Group, one of the largest alternative asset management firms in emerging markets,” he added.