En­trepreneurs cash­ing in post-1994

Finweek English Edition - - FRONT PAGE - BY BRUCE WHIT­FIELD Fin­week is a Me­dia24 pub­li­ca­tion, which is a sub­sidiary of Naspers.

“Kal­imera, Howzit. Wel­come to Ke­falo­nia, my name is Tas­sos.”

It was about as un­usual an in­tro­duc­tion to a Greek is­land hol­i­day as you could get. It turns out that Tas­sos spends part of the year at home in Bal­lito, and in the peak tourist sea­son he and his brother run the fam­ily ho­tel busi­ness in the Io­nian Is­lands, made fa­mous in the Nicholas Cage movie Cap­tain Corelli’s Man­dolin.

Tas­sos’ fa­ther was smug­gled out of Greece dur­ing its post-World War 2 rev­o­lu­tion and ended up in South Africa. He did ex­tremely well and built up an im­pres­sive coal en­ter­prise, which he sold in the tense run-up to the 1994 elec­tions amid con­cerns about the fu­ture and the im­pact that the trade union move­ment would have on the busi­ness. He re­ceived his cheque from a young guy by the name of Ivan Glasen­berg and repa­tri­ated the funds to the is­land

vil­lage of Fiskardo on Ke­falo­nia, where he in­vested in Greek prop­erty.

Glasen­berg, with his above-aver­age risk tol­er­ance, is now one of the world’s rich­est peo­ple and is plan­ning a sec­ondary list­ing of the newly merged Glen­strata on the JSE. This is while our Greek friends are stuck with vis­ually ap­peal­ing, but highly taxed brick-and-mor­tar as­sets in a bro­ken econ­omy.

The world is full of bizarre con­tra­dic­tions. De­spite much of the gloom that pre­ceded the ’94 elec­tions, well-off South Africans have done bet­ter in the past 20 years than did the gen­er­a­tion be­fore them.

As for­mer pres­i­dent Thabo Mbeki proudly pro­claimed in his 2006 State of the Na­tion Ad­dress: “Freedom has been good for busi­ness in South Africa.” He was right.

Democ­racy has been good to any­one with cap­i­tal strate­gi­cally and sen­si­bly de­ployed. The past two decades have seen the cre­ation of brand-new in­dus­tries and the gen­er­a­tion of tril­lions of rand in new value for in­vestors with the cre­ation of telecom­mu­ni­ca­tions gi­ants such as MTN and Vo­da­com, the es­tab­lish­ment of a small but vi­brant tech­nol­ogy sec­tor (ig­nor­ing the boom and sub­se­quent col­lapse of the Di­data shareprice) and the rapid ex­pan­sion of the coun­try’s cap­i­tal mar­kets.

Democ­racy has freed South Africans of all hues to grow their per­sonal wealth be­yond their wildest ex­pec­ta­tions. The über-wealthy of 20 years ago are to­day con­sid­er­ably bet­ter off, but a new gen­er­a­tion of en­trepreneurs has also seized the op­por­tu­nity af­forded them by the open­ing of global mar­kets to SA busi­ness. Many of them hap­pen to be Afrikan­ers. Ar­guably the end of apartheid and the tran­si­tion to democ­racy has done more for the eco­nomic em­pow­er­ment of Afrikan­ers than the Broederbond ever did. It is one of the most de­li­cious ironies of the demise of apartheid: the pro­tec­tion­ist ide­ol­ogy, de­signed to ad­vance the in­ter­ests of par­tic­u­larly Afrikaans-speak­ing whites, is that many of the big­gest ben­e­fi­cia­ries of the new po­lit­i­cal dis­pen­sa­tion hap­pen to be Afrikaans-speak­ing and have seized the com­mer­cial op­por­tu­ni­ties pre­sented to them over the past 20 years.

An­a­lyst JP Land­man, a for­mer edi­tor of this mag­a­zine, points out in his new book The Long View that South Africans had be­come steadily poorer in the decades pre­ced­ing the end of apartheid. Be­tween 1975 and 1993 he points out that South Africans had less and less spend­ing power. Mea­sured in 2005 rand, he says we were 11% poorer by 1993 than we had been in 1975, and that the coun­try’s per capita in­comes had been eroded steadily for two decades.

In sharp con­trast to the eco­nomic de­clines then, the past 20 years have seen the econ­omy ex­pand by 77% in real terms. Av­er­ages are danger­ous as you know – the in­equal­ity gap is sig­nif­i­cant and statis­tics


sug­gest that SA has one of the big­gest in the world. Stick your head in the fridge and your feet in the f ire and on aver­age you are absolutely fine – but Land­man’s point is valid in that more peo­ple are bet­ter off to­day than they were in 1994 and at the start of the coun­try’s new po­lit­i­cal dis­pen­sa­tion.

He high­lights the end of sanc­tions, which en­abled South Africans to in­te­grate into the global econ­omy, gain­ing ac­cess to cap­i­tal mar­kets as be­ing a pri­mary driver of this new wealth cre­ation. Com­pa­nies led by savvy CEOs have di­ver­si­fied their busi­nesses glob­ally, cre­at­ing com­pa­nies of in­ter­na­tional stature: Aspen Phar­ma­care, Richemont, SABMiller and Naspers* have all made their mark way be­yond the con­fines of the coun­try’s bor­ders.

Schol­ars of busi­ness his­tory know that few en­trepreneurs suc­ceed in a vac­uum. There is an un­der­ly­ing com­mon thread weav­ing to­gether the most suc­cess­ful Afrikaans-speak­ing busi­ness lead­ers of the past two decades. Whereas SA’s po­lit­i­cal elite, un­der the old or­der, gen­er­ally emerged from un­der the oaks at Stel­len­bosch, so too has the new Afrikaner busi­ness elite.

The bo­ere bil­lion­aires fea­tured in this story all have a strong ed­u­ca­tion or busi­ness con­nec­tion to the town, just one of them – FirstRand co-founder Lau­rie Dip­pe­naar – is from out­side the clique. There must be some­thing in the wa­ter as this town re­mains an in­cu­ba­tor of great ideas and a source of cap­i­tal for fu­ture gen­er­a­tions of bo­ere bil­lion­aires in the town that we’ve re­named Stellenbucks.





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