SA Credit Fund

Investor Profile

The Fund is suited to investors who are:

Looking for real returns on capital over a medium to long-term horizon (c.36 months), while at the same time require a degree of capital stability.

Seeking managed exposure to income generating investments with limited duration risk.

Wanting to take advantage of loans originated by the leading banks in South Africa, across a broader range of issuers than available in the listed bond market.

Fund Objectives


to achieve stable returns

The objective of the Kholo Capital Credit Co-Investment Fund is to achieve stable returns over 3-month JIBAR in excess of 300 – 350 basis points, gross of all fees and expenses.


Invest in Diversified debt instruments

The Fund aims to achieve its return target by investing in a diversified portfolio of debt instruments, predominantly in the form of bank loans to South African corporates which pay a floating rate linked to JIBAR plus a margin.


achieve Higher Returns for Investors

Given the return target of the Fund, returns are expected to be higher than returns offered by lower risk fixed income offerings.

Fund Strategy

  • The loans included in the Fund will be obtained from major investment banks in South Africa on a co-investment basis.
  • These loans will never exceed 40% of the originating investment bank’s exposure.
  • The co-investment will allow for the Fund to invest alongside the major investment bank on substantially similar economic terms with regards to the interest rate received and any underlying security.
  • Any loans that the Fund invests in will have a requirement from the originating bank to remain invested in over the entire tenor of the loan (or to sell down Kholo Capital’s exposure if they sell their portion of the loan).
  • The loans will be diversified by industry.
  • Minimum loan amounts will be R50 million with no more than 7.5% of the fund being invested in a single investment.
  • Industry exposures will be limited to 25% of the fund.
  • Exposure to loans with covenants ensuring declining leverage to limit refinance risk.
  • Prefer exposure to counterparties with shareholders of reference (e.g. private equity funds).
  • Targeting counterparties with strong cash flow generation history, strong market shares and interest aligned with management.
  • Senior secured funding to corporates as part of a leverage buy-out.

Fund Terms


Kholo Capital Credit Co-Investment Fund I

Fund Classification

South African interest bearing – short term

Investment Structure

Notes issued by an SPV

Launch Date

1 October 2020

Target Fund size      

R4 billion – R5 billion

Target Returns

3 month JIBAR + 300 to 350 bps

Weighted Average Maturity

3 years

Approx. No. of Loans in the Fund

20 – 30 



Income Distribution




Commitment Period

24 Months

Annual Management Fee   

Invested Capital: 0.5%