The Namibian Diamond Fund was founded in 2008 through an initiative between Investment House Namibia (Pty) Limited and PSG Capital (Pty) Limited. The parties have identified opportunities in Namibia for private equity investments for both institutional and private clients to have access to an alternative investment class offering traditionally higher returns than the listed equity market.

INVESTMENT DESCRIPTION

The fund aims to invest equity capital in small and medium sized unlisted companies in Namibia and also aims to promote Black Economic Empowerment (“BEE”) opportunities where possible. The fund will aim to invest, directly or co-invest as part of any consortium or minority shareholder, in a high level of diversified investments. Typical investments will include larger more mature investments, over start up or early stage investments, that offer good growth and value opportunities. The size of the investment will aim to be between N$5 million and N$50 million per investment, however this may vary depending on the nature of the investment, in companies that display strong cash generation, adequate profit histories and that have an experienced and committed management team.

FUND OBJECTIVE

The fund aims to obtain medium to long term returns above a benchmark of NCPI plus 4% by investing in unlisted companies. The funds target minimum risk adjusted return is 20%.

SUITABLE INVESTORS

The fund is suitable to sophisticated investors who display a higher tolerance for risk, have a medium to long term investment horizon and are interested in earning higher returns over the investment.

SALIENT FEATURES OF THE FUND

• Fund objective: To provide high, medium to long term, investment returns.
• Asset Allocation: Private Equity (unlisted)
• Fund Manager: Desert Equity Management Holdings (Pty)Limited
• Auditors: PriceWaterhouseCoopers Inc.
• Attorneys: Cliffe Dekker Hofmeyr
• Structure: En commandite partnership
• Minimum subscription: N$5 million (discretionary)
• Subscription frequency: Drawdown basis
• Launch date: On initial subscription by investor
• Income distribution: Limited, dependent on fund
• Term of investment: 5-7 years
• Target Fund Size: N$ 300 million
• Target returns: Minimum of 20% (but there cannot be any guarantee)
• Initial fee (once off): 0.5% of committed capital
• Management fee – invested capital: 2% per annum
• Management fee – cash in fund: 0.2% per annum
• Carried interest: 20% of returns in excess of hurdle rate
• Hurdle rate: NCPI + 4%
• Reporting: Quarterly (or more regularly if required)
• Valuations: Semi-annually (or more regularly if required)