As private markets deepen in South Africa, capital allocators are increasingly consolidating mandates and seeking one-stop-shop managers, but this shift is raising concerns. Some question whether collapsing private capital into a single bucket erodes diversification and forces managers into areas outside their expertise, while others argue that South Africa’s transformation agenda demands separate allocations to ensure inclusivity across private equity, infrastructure, private credit, and venture capital.
This debate took centre stage at the recent 2026 edition of SAVCA’s Private Equity in Southern Africa Conference, where a structured and highly charged exchange – featuring opening arguments, rebuttals and closing remarks – saw industry leaders go head-to-head on the future of private capital allocation. Moderated by Nozipho Tshabalala, CEO of The Conversation Strategists, the session revealed not only differing philosophies, but also a noticeable shift in audience sentiment.
Making the case for a more flexible, generalist approach, George Odo, Senior Partner and Managing Director for East and Southern Africa at AfricInvest, argued that treating private capital as a single allocation enables greater agility, particularly in volatile and uncertain market conditions.
“A generalist strategy allows you to spread your investment across sectors, across different countries, regions and asset classes,” he said. “Compared to a specialist strategy that effectively handcuffs you, it gives asset allocators the ability to diversify risk and pivot as opportunities evolve.”
Odo pointed to the practical implications of over-specialisation, particularly in markets subject to regulatory shifts or macroeconomic shocks. “Imagine if you had a fund that does nothing but oil and gas, or nothing but fintech. If that sector is disrupted, you have limited room to be agile,” he said. “With a generalist approach, you can ask where the opportunities are and pivot your capital accordingly.” Odo also mentioned that generalist strategies allow the manager to build a diversified portfolio with the appropriate caps for each sector to manage risk.
Beyond flexibility, Odo emphasised the importance of simplicity in a market where private capital is still relatively new and nascent in Africa. “We have to educate about private capital as an asset class,” he said. “If we start by overcomplicating the message with multiple sub-allocations and hybrid structures from the start, we risk losing our audience before we’ve even brought them into the asset class.”
However, this perspective was firmly challenged by those advocating for more clearly defined and separate allocations. Saad Sheikh, Partner and Co-Head of Debt Strategy at Enko Capital, stated that bundling private capital into a single allocation risks obscuring performance and undermining accountability.
“If you throw everything into one mix and get a single number out, you’ll never know which asset class performed well and which one didn’t,” he said. “That makes it very difficult to assess returns or make informed allocation decisions over time.”
Sheikh stressed that different private capital strategies have inherently different risk-return profiles, liquidity characteristics and roles within a portfolio. Treating them as a single allocation, he argued, ignores these nuances. “Rather, segment that pool of capital into strategies that investors understand and are comfortable with. That way, you can allocate more efficiently and ensure that each component is delivering on its specific objective.”
He also cautioned against so-called ‘blind pool’ investing, where capital is committed without sufficient visibility into how it will be deployed. “What we don’t want is capital going into a blind pool with no clarity on where returns are coming from,” he said. “When that underperforms, the entire asset class is blamed, rather than understanding where the issue and risk actually sit.”
The debate also surfaced a broader industry challenge around education. While regulatory frameworks in South Africa allow for a range of private market allocations, uptake across certain strategies remains limited. This is less about restriction and more about familiarity, with many allocators still building comfort with newer segments such as private credit.
In this context, the question is not only how private capital should be structured, but how it should be understood. A grouped approach may lower the barrier to entry, while a segmented approach may enhance sophistication over time.
Ultimately, the discussion highlighted that private capital is not a monolith. Each strategy behaves differently across the investment lifecycle, with varying implications for liquidity, risk and return. The challenge for allocators is to balance the need for flexibility with the discipline of clear allocation frameworks.