PE houses create value by investing in shareholdings of companies (both majority and minority positions), active management of these portfolio investments over the medium- to long-term, implementation of value generation ideas within the portfolio companies and then ultimately, the realisation or sale of these companies. PE houses typically acquire companies which they believe are undervalued by the market and offer value-generation opportunities through company growth, financial and operational restructuring, the sale of assets or the strengthening of management etc. After this enhancement in value is achieved these companies are realised/sold through trade sales, IPOs or sold to other PE houses.
KPMG was one of the first financial professional services firms in South Africa to have a Private Equity Group, which was established in 2004, with the intention of bringing together our professionals from different business units (Corporate Finance, Transaction Services, Tax and Legal professionals) to target and work with PE houses.
The members of the group aim to provide a broad-ranging approach to PE industry issues. This includes: deal sourcing, due diligence investigations, deal structuring, corporate restructuring and macro-economic financial modelling - catering for all stages of the private equity life-cycle.
KPMG in South Africa offers services throughout the lifecycle of a PE house, including:
- Fund raising - regulatory advice, fund audit, tax structuring and investor reporting, legal assistance
- Investing - transaction services, corporate finance, mergers and acquisitions, tax and legal services
- Management - audit, tax, legal and advisory services for portfolio companies
- Realisation - realisation tax-planning, TS, CF and M&A tax and legal.