Trustco announces N$1.9b investment
Trustco Group Holdings Limited this week announced that a long-time collaborator, Riskowitz Value Fund (RVF), a US-based fund, has entered into a six-months non-exclusive agreement to invest up to US$100 million (about N$1.9 billion) of hybrid capital into the Namibian entity.
“RVF’s proven track record and in-depth understanding of global markets make them a valuable asset as we explore strategic investment opportunities,” stated Quinton Zandré van Rooyen jr, Trustco’s deputy CEO, adding; “This collaboration aligns perfectly with our combined vision.”
“With the listed equities on the JSE shedding nearly ZAR2.3 trillion in market capitalisation in 2023, Trustco actively sought opportunities to access new sources of capital,” Van Rooyen added.
“RVF is a 23% shareholder in Trustco, and has been an equity holder in Trustco for more than 10 years. Their confidence in our diverse portfolio of investments, strong management team and growth prospects make them an ideal collaborator. We are confident that their investment expertise and knowledge of the North American capital markets will be invaluable. This strategic alliance sets the stage for Trustco’s next chapter of unparalleled growth.”
Trustco on Tuesday stated that the agreement stipulates that RVF can invest up to US$100 million for its own account, and no commission or fee will be paid by either party.
“Investors can expect Trustco to make the necessary public disclosures regarding progress in due course through the relevant stock exchange news services. The transactions allow Trustco and RVF to capitalise on the unreasonably low market valuation of Trustco, to create long-term value for all Trustco shareholders,” read a Trustco statement.
Riskowitz Value Fund LP is a hedge fund operated by Protea Asset Management LLC, known for its strategic focus on compounding partners’ capital at a high rate over the long-term while minimising the risk of permanent capital loss. With a robust investment approach, the fund seeks to identify and invest in a select portfolio of listed companies, primarily in emerging markets, leveraging the region’s dynamic business environment and opportunities.
Established with a commitment to intelligent investing, Riskowitz Value Fund stands out with its deep understanding of the companies and market dynamics in emerging markets, guided by the expertise of a management team experienced in the region. The fund’s philosophy is built on the foundation of seeking out companies with excellent management and strong business economics, aiming for sustainable growth and value- creation. During January this year, it was reported that Trustco offered an equity investment of up to N$950 million to RVF. The injection of funds was expected to accelerate Trustco’s ongoing value-creation initiatives, including share buybacks and the distribution of dividends.
“These shareholder actions allow Trustco to convert national potential into investment opportunities and shareholder returns, and reinforces our progressive trajectory and diversification strategy,” said Van Rooyen at the time.
This move is part of Trustco’s plan to raise N$2,4 billion from shareholders, which also includes changing a large debt into shares.