PSG is more than Curro

When most investors think of the PSG Group they will think of the company’s massively successful investments in Capitec and Curro. They may also consider the substantial interests it holds in two other listed companies, PSG Konsult and Zeder Investments.

Certainly almost all of the current value in PSG Group is held in these four companies. However, as CEO Piet Mouton reminded attendees at the group’s AGM in Stellenbosch, PSG is not a typical investment holding company.

“There is a fundamental difference between PSG and most investment companies,” he said. “We have been very good historically at early stage investments. We were there from the beginning with PSG Konsult when there were only five brokers, and with Curro when it only had three schools. We use PSG Alpha to find these kinds of investments and, hopefully, they can have similar success to the big companies in the group.”

For investors, therefore, the opportunities within the PSG Group should be as much about what is already established in its portfolio as to what is coming next.

PSG Alpha invests in companies with “exceptional growth potential that could become significant assets in the broader PSG Group.

“We have learnt a lot of lessons throughout the years. One thing that’s very important is that it’s as easy or difficult to build a big company as a small company. So if you do get it right, the industry must be big,” said Mouton.

Banking and education are obvious examples. Capitec has nearly 10 million customers, but it is still only the fourth-largest bank in the country by market capitalisation. Curro has over 52 000 pupils in its schools, but estimates that the potential market of pupils who can afford its offerings is three million.

“If we do get it right, then we should be able to reap big benefits,” Mouton said.