As a result of the South African government’s policy to issue hospital licenses mainly to historically disadvantaged individuals, most licence holders find it difficult to raise the equity required to access debt financing. This has presented us, RH Bophelo, with a rare opportunity to partner with the licence holders and invest the equity required.
The Razorite Healthcare and Rehabilitation Fund, which is managed by the management company that manages RH Bophelo, is the only institution in South Africa whose sole mandate is to provide equity to finance the construction of hospitals. The Razorite Healthcare and Rehabilitation Fund does not have enough committed capital to fund all the projects in its pipeline. This presents yet another opportunity for us to co-invest with the Razorite Healthcare and Rehabilitation Fund.
The management company that manages RH Bophelo has built a reputation with various Departments of Health, projects sponsors and licence holders. This has led to the ease with which it finds investment opportunities.
Our strategy is to leverage the Management Company and the Razorite Healthcare and Rehabilitation Fund’s reputation and experience to access public financing for the projects. Through this, RH Bophelo will not need to invest ample time, nor resources to build a project pipeline.
Beyond our reasons, RH Bophelo believes that healthcare is the cornerstone of true wealth, and our contribution in growing the industry is much needed.