KTH eyes Africa

Finweek English Edition - - SPOTLIGHT - BY BUHLE NDWENI

Un­listed in­vest­ment hold­ings com­pa­nies Kag­iso Trust In­vest­ments (KTI) and Tiso Group (Tiso) both fo­cused on pur­su­ing in­vest­ment op­por­tu­ni­ties in the BEE space. A merger in 2011 saw the cre­ation of Kag­iso Tiso Hold­ings (KTH) and a change in strat­egy away from a fo­cus on BEE op­por­tu­ni­ties to be­com­ing a Pan-African in­vest­ment com­pany. CEO, ex­plains its new strat­egy. ince the mid-2011 merger be­tween KTI and Tiso, the KTH team has been busy forg­ing its foot­print on the con­ti­nent. In line with its strat­egy to grow its port­fo­lio be­yond SA borders, par­tic­u­larly into the West and East African re­gions, KTH bought a 15% stake in Fi­delity Bank in Ghana for around $35m (R400m) 18 months ago. An in­vest­ment, says CEO Vuy­isa Nkonyeni, that is al­ready show­ing con­sid­er­able growth in both dol­lar and rand re­turns.

Other re­cent ac­qui­si­tions in­clude a 40% stake in Nige­rian-based healthcare di­ag­nos­tics com­pany Me Cure Healthcare (Me Cure), in July, which also al­lowed them to di­ver­sify into the healthcare space.

Back on lo­cal soil, KTH con­cluded t he ac­qui­si­tion of a 51% stake (at a price tag of just un­der R1bn) in fa­cil­i­ties man­age­ment com­pany Ser­vest, in June. While ap­prox­i­mately 50% of its earn­ings and rev­enues are from SA, it also has a pres­ence in east, west and south­ern Africa and in the UK.

“Ser­vest ticks all the boxes in terms of the type of as­set we were look­ing for,” says Nkonyeni.

“Firstly, it is in the ser­vices sec­tor, which we view as an at­trac­tive and high growth sec­tor, and has a diver­si­fied ser­vice of­fer­ing. It also has strong de­fen­sive qual­i­ties, and is there­fore likely to out­per­form on a rel­a­tive ba­sis in both good and chal­leng­ing eco­nomic cy­cles. It is also highly cash gen­er­a­tive and in terms of size has a large mar­ket cap­i­tal­i­sa­tion that meets our size re­quire­ments. Fi­nally, the busi­ness has a very strong and ca­pa­ble man­age­ment team that has his­tor­i­cally been able to de­liver at­trac­tive re­turns con­sis­tently to its share­hold­ers.”

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