Commodification of black managers

How investment managers & capital allocators are pitted against each other

I had the pleasure of having brunch with one of the fund managers I respect and have admired since I was at university — to ensure that, as the reader you are aware, this will be focused on the black experience

Speaking about deals and other possible managers, allocators and investors we can bring to the deal, we hit on one of the big names, a formidable investor with international appeal and reputation.

The conversation shifted, not out of any ill thinking on the part of this investor but on how the market values managers.

In the private equity space, a lot of emphasis is on the brands of the Capital allocators, their proximity to power and their appeal — nothing new. It works like that in any market.

What is interesting about the South African market is how this has become the driving force behind empowerment deals and subsequent jostling for position and appeal amongst black fund managers, capital allocators and investors.

This commodification of individuals according to their social standing and proximity to political power, plays a major role in undermining economic principles in deal structure — not necessarily finding the best placed or suited partner but one that has the biggest brand to make you noticed and the deal given some gravitas.

Collaboration between and among the black managers is scant and almost non-existent, as the drive is to be picked as the flavour of the month, by established capital.
We need to do better, we need to be better and more importantly take time to build really robust networks to be able to collaborate, co-invest and share the pies and the pains of this market.

Black enterprise will only really rise, if we have an effective black capital base to invest in promising, sound businesses.