Ru­pert the bear on the prowl

Finweek English Edition - - Companies & Markets - MARC HASEN­FUSS

REINET IN­VEST­MENTS, the new Lux­em­bourg-based in­vest­ment fund of­fered to share­hold­ers of Richemont and Rem­gro, couldn’t have timed its launch any bet­ter. Reinet, which re­leased its prospec­tus last week, will start scour­ing for op­por­tu­ni­ties at a time when as­set val­ues across the board have been smacked silly by the pre­vail­ing fi­nan­cial cri­sis.

The prospec­tus sketches a very broad in­vest­ment man­date – in­clud­ing al­low­ing for gear­ing (an anath­ema in the cash-flush Ru­pert com­pa­nies), the use of de­riv­a­tives and cur­rency hedges.

Reinet will ini­tially com­prise a hold­ing of 3% to 4% of Bri­tish Amer­i­can To­bacco (BAT), along with around R4bn in cash and smaller in­vest­ments in­her­ited from Richemont.

Un­for­tu­nately, there’s a paucity of in­for­ma­tion in the Reinet prospec­tus about the smaller in­vest­ments in­her­ited from Richemont, which amount to a not in­sub­stan­tial €55m (R600m). Its prospec­tus also doesn’t make it clear whether the sig­nif­i­cant mi­nor­ity hold­ing in BAT is a strate­gic in­vest­ment for the longer term or merely a short-term po­si­tion that will be liq­ui­dated to build funds for new op­por­tu­ni­ties.

But the bot­tom line is that Ru­pert fam­ily ven­tures (be it Richemont or Ven­Fin) have cre­ated huge value for share­hold­ers. As such, Reinet of­fers in­vestors a triple whammy: ex­cel­lent track record in build­ing longterm value. ve­hi­cle at a time when plenty value laden op­por­tu­ni­ties ex­ist glob­ally. mally be avail­able to or­di­nary in­vestors in SA.


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