Creation Capital launches unique R3bn hybrid debt fund to expand funding for “missing mid-corporate market”

Key take-outs:

• The Creation Yield Fund is an innovative hybrid private credit vehicle that combines privately originated debt investments with a listed note structure
• It provides a transparent, scalable and Regulation 28-friendly structure that connects institutional capital with productive sectors of the economy
• The fund contributes to bridging the R350 billion funding gap in the “missing mid-corporate market”

Specialist private credit investment manager Creation Capital has launched the Creation Yield Fund, an innovative hybrid private credit vehicle that combines privately originated debt investments with a listed note structure on the Cape Town Stock Exchange (CTSE).

The fund is introduced through Creation Capital Investments’ existing CTSE-listed debt note programme, with the listing effective 15 July 2026. The features of the fund make it a first of its kind on the CTSE.

The fund has a target size of R3 billion and launches with an initial issuance of R300 million anchored by a large South African pension with over R100 billion in assets under management.

It is designed to channel institutional capital into South Africa’s underbanked SME and mid-corporate market sector, while offering investors access to the attractive risk-adjusted returns associated with private credit. The “missing middle” is an area that remains critical to economic growth, job creation and business development and yet remains underserved: according to the Q2 2025 Real Economy Bulletin by Trade & Industrial Policy Strategies (TIPS), bank lending in SA heavily favours corporates at 51%, against SMEs at 13%.

With a minimum investment of R50 million, the listed note is designed to appeal to institutional investors such as pension funds and insurers, as well as high-net-worth individuals and family offices. Its floating rate structure also makes it suitable for fixed income managers searching for resilient, predictable cash flows linked to prime, while being able to directly stimulate economic growth in South Africa’s SME landscape.

Creation Capital CEO Kasief Isaacs said: “Private credit has become increasingly attractive to investors because it can unlock differentiated yield opportunities in areas of the economy that are often underserved by traditional lenders. However, access to the asset class has historically been constrained by liquidity considerations and regulatory allocation limits applicable to unlisted investments.

By bringing the fund to market through a listed note structure, Creation Capital enables investors to access private credit exposure through a regulated, exchange-listed instrument.

This is particularly significant in the context of Regulation 28 of the Pension Funds Act: while retirement funds face tighter constraints when allocating capital to certain unlisted and alternative investments, listed debt instruments benefit from broader allocation capacity.

Investors can access the return and impact characteristics of private credit while benefiting from the governance and disclosure standards associated with a listed instrument and retaining some of the oversight rights they typically receive in an unlisted fund,” Mr Isaacs said.

Private credit in SA
While there have been some concerns of a private credit bubble in developed markets (the USA in particular), the South African market has more rigorous underwriting standards. “Covenant-lite” loans for example are a rarity in SA.

In the domestic market, the role of private credit in helping bridge the financing gap for SMEs is well recognised. Creation Capital has built a strong track record of backing scalable businesses with real growth potential while maintaining a disciplined focus on credit quality.

Over the past eight years, the company has invested in more than 470 SMEs, supporting nearly 9,000 jobs across sectors that form part of South Africa’s productive economy, including property development, trade finance, renewable energy and more. The Creation Yield Fund is intended to scale that impact by directing additional institutional capital into on-lending businesses that require funding to expand operations, create employment and strengthen economic resilience.

An example of this strategy is Creation Capital’s R75 million private debt investment in 2025 into Quest Capital Solutions, an SME-focused non-bank lender serving South Africa’s logistics sector. The funding enabled Quest to extend financing to transport and logistics entrepreneurs that have traditionally struggled to access credit through conventional banking channels.

Mr Isaacs says investments of this nature demonstrate how private credit can support specialist lenders, expand access to finance and strengthen broader SME ecosystems.

See the attached private credit explainer....