says that their approach can’t be summed up in any one word. “We blend value and growth approaches, but we have a strong preference for high- quality businesses that are dominant in their industries. And we are consistent in focusing on businesses that generate large cash flows.”
This doesn’t mean they ignore broader economic trends. They pay close attention, but realise that trying to forecast what happens next is futile. A case in point was Sasol. “Last year, we had close to 7% of the fund in Sasol at the end of September − it was one of the best ideas in the fund. But by the end of October, we were out of Sasol and we had moved into companies that would benefit from lower oil prices.” The fund subsequently added to positions in retailers like Woolworths, Shoprite and Foschini.
An unusual pick is Investec. “We think it ’s priced like a bank, but it i s actually half an asset manager. So we think I nvestec i s grossly undervalued and that there is upside potential in earnings as they work out all the bad loans from the system. There is also a massive offshore earnings component which we find attractive,” adds Booysen.
With fund assets at around R2bn, there is the flexibility to invest i n small caps. “We know the high- quality companies well − but the combined total of small caps in the fund will never be more than 5% of the portfolio.”