Acorn provides several defining and differentiating qualities to our investors and our targeted partner companies:
Alignment of interest
Acorn is and will be a significant investor into each of its funds and will therefore have the same interests at heart as our fellow investors. The Partnership agreement has been and will continue to be structured to provide the investors (limited partners) with maximum protection. As General Partner, Acorn General Manager (Pty) Ltd does not have the benefit of limited liability.
Acorn has endeavoured to align itself with several key players in the targeted investment markets to ensure on-going deal flow and maintain a competitive advantage. These strategic alliances further provide invaluable insight into a wide spectrum of promising industries.
Investment track record
The Acorn team has a proven track record of delivery and performance in the industry. Acorn General Fund One, focused on SMEs in Southern Africa, achieved a fully realised gross IRR of 46% per annum and 3.5 gross times money over 6 years. Although Acorn will not attempt to match these exceptional returns, it is an indication of the ability of the key individuals to achieve superior returns over a long-term period.
Positioning and timing
“History shows that the best private equity funds are born after the ends of recessions.” David Snow.
Acorn has positioned itself to take advantage of the current pricing in the markets and is able to enter into transactions on very favourable terms. The current economic situation has created opportunities to build a very profitable portfolio at substantially discounted prices. Acorn will also apply appropriate exit strategies to take advantage of the market cycles and maximise partners’ returns once the markets and economies have stabilised.
The key individuals of Acorn Equity have in-depth private equity experience and a strong understanding of Southern African markets.
Acorn has chosen to be a FSB registered investment manager. This is not a requirement for Acorn, but serves as a strong governance process to provide comfort and security to all investors. Acorn is absolutely committed to doing business in an ethical way, and will act honestly and ethically in all of its dealings and negotiations with business partners. In addition, Acorn has also opted to outsource its compliance function to Moonstone Compliance (Pty) Ltd – an independent provider.
Selective deal making
Acorn is very selective in the transactions that it enters into. Acorn’s strong deal flow potential allows us the luxury of being selective about the investments we make. Up to two seats on our investment committee is available to Partners invited at the discretion of Acorn. This allows those partners to contribute and partake in the management and decision-making processes at a strategic level. Acorn also appoints independent non-executive members to the investment committee.
Strict risk management
Acorn endeavours to achieve returns superior to the industry standard without assuming additional or unnecessary risk through its investments. Acorn will not enter into potential high-return transactions if the risk is deemed to outweigh the potential returns of the transaction. All partners need to accept that a higher degree of risk is inherent in the industry, but that Acorn will strictly manage and limit that risk, within reason.
Creative approach to acquisitions and operational expertise
The Acorn team has proven its ability and experience in being creative and innovative when it comes to the structuring of acquisitions, the disposals of investments and the closing of transactions.