Brait, the owner of Virgin Active, New Look in the UK and soon to be listed Premier, says it will cede its management agreement with Ethos Private Equity to The Rohatyn Group (TRG), but incentives for Ethos team members working on Braint’s strategy will remain the same.
This was to “ensure alignment with investors on Brait’s strategy to unlock value to shareholders by unbundling by December 2024”, Brait said yesterday in a statement.
Premier’s listing next month leaves questions about how Brait plans to unlock value to shareholders of New Look and Virgin Active – and even a possible listing of Virgin Active has not been ruled out.
The changed management agreement followed an announcement yesterday that TRG, a specialised global asset management firm focused on emerging markets and real assets, plans to acquire Ethos Private Equity (Ethos), a leading alternative asset management firm in Africa, for an undisclosed sum.
Founded in 2002, TRG holds more than $6 billion (R104bn) in assets under management and employs over 120 professionals in 16 cities across the US, Latin America, Europe, the Middle East, India, Southeast Asia and Oceania.
Ethos, established in 1984, is an investment manager in Africa with private equity and mezzanine strategies of more than $1.7bn in assets under management.
Brait’s board said in a statement they had appointed a sub-committee to negotiate and settle the terms of the cession of their agreement, and all key members of the Ethos team responsible for providing the contracted investment strategy services to Brait were expected to remain in their roles.
Ethos chief executive Stuart MacKenzie said their acquisition by TRG was “the start of an exciting new chapter for Ethos and the culmination of the strategic transformation we started in 2016”.
Ethos had worked to diversify its product range, geographic footprint and sources of capital since 2016.
“This (is) a compelling opportunity for us to pursue the next growth phase as the African arm of TRG, one of the largest alternative asset management firms in emerging market,” said McKenzie.
“Incorporating Ethos will expand TRG’s capabilities and local presence during a volatile period in financial markets, giving investors access to one of the largest and fastest growing regions in the world,” a statement said Monday,
Since 1984, Ethos has made over 150 investments supporting South African and sub-Saharan businesses. Meanwhile, investment teams at TRG offer capabilities across public equities, corporate and sovereign debt, private markets, forestry, agriculture and infrastructure.
Rohatyn chief executive Nicolas Rohatyn said philosophical and cultural similarities between the two firms were apparent from the start.
“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."
He said the combined firm would have almost $8bn in assets under management and almost 400 institutional LPs (limited partners).
“TRG will provide the Ethos business with exposure to a new group of investors and further align our combined efforts with LPs to strengthen the foundations of capital markets on the African continent,” said Rohatyn.
BUSINESS REPORT