Key to sustainable growth

The investment objective of WDB Investment Holdings is to achieve both growth and cashflow on a sustainable basis. An investment may yield both, or only one, says WDB Investment Holdings (WDBIH) chief investment officer Nicola Gubb. From a portfolio perspective, the company must balance capital growth with cash flow, due to the fact that the WDB Trust relies on regular dividends to fund its programmes. For this reason, sustainable growth is key.

WDBIH’s business comprises three elements: the Large Cap Portfolio, the Mid Cap Private Equity Portfolio and Enterprise Development (through its strategic investment in business incubator Seed Engine and the WDB Seed Fund).

The Mid Cap Private Equity Portfolio is a new asset class for which the board has allocated capital and recruited a team. The Enterprise Development initiative, driven through the WDB Seed Fund, has been established to fill the “missing middle” loan and equity funding for entrepreneurial small-businesswomen. It is, however, the Large Cap Portfolio for which WDBIH is best known.

A significant portion of this portfolio is invested in the banking and insurance sectors, says Gubb, with the largest exposures in Discovery Holdings (Discovery) and the FirstRand Group (FirstRand), followed by Assupol and MMI. A further 20% of WDBIH’s portfolio is invested in industrials such as the Bidvest Group (Bidvest) and Bidcorp Limited, with the reminder in the health-care sector (Ascendis Health), retail (Woolworths) and media.

Investment partnerships are seen as the cornerstone of WDBIH, and Gubb says the company nurtures the relationships they have developed both in terms of its investee companies, fellow BEE investment companies (Mineworkers Investment Company