Socially responsible investing and social private equity in South Africa

Abstract

The purpose of this exploratory research is to explore the nature of socially responsible investment (SRI) activity in South Africa. More especially, and on the back of the reported success of private equity in South Africa, the study seeks to establish the potential of a social private equity investment model as a subset of SRI? The study interviewed twelve investment professionals using in-depth semi¬structured interviews. The study found that, contrary to what the literature had revealed about trends in the UK and the US,. the respondents had a more cohesive understanding of what characterised SRI activities. The study also confirmed developed market trends that scepticism about the commercial value offered by SRI activities still prevailed among investors. The study further revealed that a great deal of effort was being channelled towards the development of best-in-class measurement tools to measure and report on social value added, even by those who did not view themselves as being active in the SRI arena. Although still in its embryonic stage, respondents were found to be very positive about the potential for social private equity within the SRI arena. The research makes recommendations that speak to the urgent need for improved and increased industry engagement on ways to develop the sector, as well as ways to market and increase the profile of the efforts and successes already achieved on both financial and social aspects.