Key Takeaways
- • Post-investment monitoring is now a return driver rather than a compliance function, according to an Insurance Biz analysis by Kabelo Malepe dated 21 October 2026.
- • Research across more than 100 post-2020 vintage funds found managers focused on asset operations achieve an internal rate of return two to three percentage points higher, on average, than peers.
- • Earlier research found roughly two-thirds of total returns on global buyout deals entered in 2010 or later and exited by 2021 came from multiple expansion and leverage rather than operational improvement.
- • Research on 70 successful private equity deals found value creation was driven mainly by company outperformance tied to changes in board behaviour rather than financial engineering.
- • The South African Venture Capital Association's latest industry survey reports that collecting and reporting financial and non-financial metrics is now table stakes for attracting institutional capital.
Summary
As South Africa's private equity market matures, post-investment monitoring is becoming central to return generation. Insurance Biz argues that what happens after a deal closes now matters as much as the transaction itself, and that monitoring has moved from a compliance task to a source of returns.
The article notes that for much of the past decade, returns were largely driven by market conditions. Research on global buyout deals entered in 2010 or later and exited by 2021 attributed roughly two-thirds of total returns to multiple expansion and leverage, with active ownership a secondary contributor. With multiples compressed and leverage more expensive, that return composition is harder to replicate.
According to the article, research across more than 100 post-2020 vintage funds found that managers focusing on value creation through asset operations achieve an internal rate of return two to three percentage points higher on average than peers. Governance is a major part of the explanation. Research covering 70 successful private equity deals identified company outperformance, driven by changes in board operation, as the primary source of value creation.
Citing Egon Zehnder research, the article describes four traits that distinguish private equity boards from listed company boards: an aligned shareholder base, decisiveness in probing management, a results orientation with expectations set ahead of historical performance, and deep engagement with operations. In practice, well-run funds hold regular touchpoints with the CEO and CFO on value-driving initiatives and track a small set of operational key performance indicators.
The South African Venture Capital Association's most recent industry survey reportedly finds that the ability to collect and report financial and non-financial metrics is now a prerequisite for institutional capital, and that most local managers say ESG strategies actively enhance exit proceeds. The article concludes that monitoring is a deliberate differentiator for disciplined managers, particularly as multiple expansion can no longer be relied upon.
The article notes that for much of the past decade, returns were largely driven by market conditions. Research on global buyout deals entered in 2010 or later and exited by 2021 attributed roughly two-thirds of total returns to multiple expansion and leverage, with active ownership a secondary contributor. With multiples compressed and leverage more expensive, that return composition is harder to replicate.
According to the article, research across more than 100 post-2020 vintage funds found that managers focusing on value creation through asset operations achieve an internal rate of return two to three percentage points higher on average than peers. Governance is a major part of the explanation. Research covering 70 successful private equity deals identified company outperformance, driven by changes in board operation, as the primary source of value creation.
Citing Egon Zehnder research, the article describes four traits that distinguish private equity boards from listed company boards: an aligned shareholder base, decisiveness in probing management, a results orientation with expectations set ahead of historical performance, and deep engagement with operations. In practice, well-run funds hold regular touchpoints with the CEO and CFO on value-driving initiatives and track a small set of operational key performance indicators.
The South African Venture Capital Association's most recent industry survey reportedly finds that the ability to collect and report financial and non-financial metrics is now a prerequisite for institutional capital, and that most local managers say ESG strategies actively enhance exit proceeds. The article concludes that monitoring is a deliberate differentiator for disciplined managers, particularly as multiple expansion can no longer be relied upon.
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