The win last week in Johannesburg allowed Grace to qualify for this week's event. He shot a 7-under-par 66 Friday for a 36-hole total of 12-under 134.
Jose Maria Olazabal had a second-round 68 and is alone in fourth at 7-under 139.
Seven players are tied at 6-under. The group includes Nicolas Colsaerts, who led by four strokes after the first round. But he was 5-over at one point Friday and finished the second round with a 3-over 76.
Grace had a birdie at the second hole and then three consecutive birdies over Nos. 4-6 to get to 4-under on the day. He had a bogey at the seventh hole and a birdie at the 10th. He pulled ahead with another string of three birdies over holes 14-16.
The Volvo Golf Champions is an exclusive event that includes winners from the European Tour last year, players who won the first two tournaments on the 2012 schedule -- Grace and Louis Oosthuizen -- and current tour members under the age of 50 who have won more than 10 tournaments. The 2012 field includes 35 players.