New asset class launched in South Africa

MeTTa Capital has introduced a new asset class in South Africa known as the secondaries fund, aimed at addressing the liquidity challenges faced by investors in private equity and alternative investments. The secondaries fund buys pre-existing investor commitments, offering investors an opportunity to purchase assets at a discount and potentially capitalize on further upside potential. The Co-fund Manager of MeTTa Capital, Tivon Loubser, explained that the concept of secondaries has gained significant global traction, with $144 billion in transaction value recorded in 2024 alone. Despite this global trend, South Africa has not had a solution for illiquidity in the private capital markets, making the introduction of MeTTa Secondaries fund crucial for the local investment landscape. The traditional nature of private equity investments, which typically require long-term commitments, has led to the emergence of 'zombie funds' where exit events fail to materialize. The lack of exit options in the market has been exacerbated by the growth in private equity transactions, resulting in a scarcity of exit opportunities. MeTTa Secondaries fund aims to provide a solution to this issue by offering liquidity events to investors along the investment timeline. One of the initial offerings of the MeTTa Secondaries fund is the Calon Ventures Partners Fund, focused predominantly on technology ventures. This fund, with a seven-year demonstrable track record, presents investors with an opportunity to access high-quality assets at a discounted rate. Despite being in the early stages of market introduction, the reception towards MeTTa Secondaries fund has been promising, indicating a growing demand for liquidity solutions in the private capital markets. The fund's future investments will diversify across a range of secondaries interests to offer investors a basket of opportunities. While acknowledging the inherent risks associated with high-risk investments like tech startups, Loubser highlighted the active approach taken by MeTTa Capital to address exit and liquidity risks. By actively participating in boards and seeking exit opportunities, the fund aims to provide a secure investment environment for its clients. As the South African market adapts to this innovative investment vehicle, the success of MeTTa Secondaries fund will be closely monitored to determine its impact on the local investment landscape.