STANLIB Invests R250 Million in Prefcap to Boost SA SMEs

STANLIB Asset Management has provided funding of R250 million to Preference Capital Group (Prefcap), a prominent financial services provider focused on financing small and medium-sized enterprises (SMEs).

This funding elevates Prefcap’s total capital raised to R700 million over the past year.

Zeyn Ismail, STANLIB Fixed Income Portfolio Manager for Private Markets, says, “This investment highlights STANLIB’s dedication to fostering economic growth, particularly through South African SMEs, which are vital for job creation. By supporting these businesses, we aim to empower them to succeed in a challenging economic environment.”

After a comprehensive evaluation of Prefcap’s lending practices, risk management strategies, and proven track record of sustainable growth, STANLIB has confidence in Prefcap’s mission of responsible lending and economic empowerment.

STANLIB’s private markets expertise is integrated into its established and award-winning Fixed Income team to deliver a comprehensive offering that encompasses both public and private credit markets. This comes as the fixed income market continues to change and many investors are increasingly recognising the value of integrating private debt into their portfolios, acknowledging its potential for enhanced returns and diversification.

Like traditional fixed income, which primarily focuses on listed and tradable debt instruments, private market debt offers the potential for attractive risk-adjusted returns while ensuring capital preservation. Investments in private debt instruments typically require thorough fundamental analysis and are usually unlisted, resulting in low correlation with traditional listed debt and equity markets.

“Our investment in Prefcap demonstrates our belief in their business model and growth prospects. We acknowledge the essential role they play in the financial ecosystem, particularly in overcoming the barriers SMEs face in securing traditional bank financing,” Ismail added.

This capital infusion comes at a crucial time, as many SMEs continue to encounter difficulties in accessing financing, making Prefcap’s innovative solutions increasingly vital.