Creation Capital has introduced the Creation Yield Fund, a R3 billion private credit fund listed on the Cape Town Stock Exchange (CTSE). By merging privately sourced debt with a listed note framework, the firm aims to direct institutional funding toward South Africa’s neglected SME and mid-corporate sector.
The fund, listed on July 15, launched with an initial issuance of R300 million, anchored by a South African pension fund managing over R100 billion in assets. It targets a financing gap in South Africa’s “missing middle,” where 51% of bank lending goes to corporates compared to 13% for SMEs, according to the Q2 2025 Real Economy Bulletin by Trade & Industrial Policy Strategies (TIPS).
Bridging the Financing Gap for SMEs
The fund is designed to provide institutional investors with exposure to private credit through a regulated, exchange-listed instrument. With a minimum investment of R50 million, it targets pension funds, insurers, family offices, and high-net-worth investors. The floating-rate structure appeals to fixed-income managers seeking predictable returns linked to the prime lending rate.
Kasief Isaacs, CEO of Creation Capital, stated, “Private credit has become increasingly attractive to investors because it can unlock differentiated yield opportunities in areas of the economy that are often underserved by traditional lenders.” The listed note structure also benefits retirement funds under South Africa’s Regulation 28 framework, offering broader allocation capacity than certain unlisted alternative investments.
Unique Structure and Governance Features
The fund is structured as a 10-year, tradeable debt note, offering six-monthly interest payments and capital repayment at maturity. This structure, uncommon in South Africa’s private credit market, includes governance features like an advisory board, typically associated with unlisted funds. The note offers coupons of prime less 1.5% and is expected to generate a minimum return of prime plus 0.5%, providing protection against rising inflation.
Isaacs added, “We believe this pricing achieves a good balance between compensating investors for the underlying illiquid nature of the assets while being attractive to investors who regularly trade notes, bonds, and similar instruments.” The fund focuses on loans with regular repayment schedules, typically monthly or quarterly, to support its structure.
Enhanced Certainty and Oversight for Investors
The fund’s structure provides investors with greater certainty through contractual coupon payments and capital repayment. This contrasts with traditional unlisted private credit funds, where distributions often depend on available cash flows and manager discretion.
Creation Capital received legal advice from Webber Wentzel on the fund structure and Megan Black Attorneys on the note issuance, ensuring compliance with regulatory requirements.
Creation Capital’s Track Record and Future Outlook
Creation Capital has invested in over 47 SMEs in the past eight years, supporting nearly 9,000 jobs across sectors like property development, trade finance, and renewable energy. Earlier this year, the firm invested R75 million in Quest Capital Solutions, an SME-focused non-bank lender in South Africa‘s logistics sector.
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