ARC bolsters net assets, portfolio value
AFRICAN Rainbow Capital has reported that it has added a further R2,3bn investment to its ARC Fund for the period ended December.
Since listing, the group comprised a intrinsic portfolio value of R4,4bn and cash and other net assets of at least R4,26bn.
African Rainbow Capital Investments Limited (ARC Investments) listed on the JSE last on September 7 last year and its overriding objective was to be a permanent capital vehicle for investors to invest in a broad-based black controlled entity with an underlying diversified portfolio of investments.
JSE lauded the listing and said at the time it was privileged to assist ARC Investments achieve its growth objective.
“The listing of ARC Investments represents important progress in the transformation of the financial services sector,” director for capital markets at the JSE, Donna Nemer said at the time of the listing,
“The JSE is proud to be able to aid in its growth through providing the company with access to deep pools of capital by means of a credible, liquid and well-regulated platform.”
The initial underlying investment portfolio in ARC Investments through its investment in the ARC Fund comprised of 100% of ARC’s interests in its non-financial services portfolio companies and 49.9% of ARC’s interests in its financial services portfolio companies
“By investing in a broad range of sectors and through a variety of types of listed and unlisted equity, the ARC Fund generally seeks to gain exposure to growth and early-maturity stage businesses in which management teams are appropriately incentivised”.
The group’s total portfolio value increased by 3,9% to R9bn at December 31, comprising intrinsic portfolio value of R7bn and cash and other net assets of R1,99bn.
It said that investments have generally shown good financial performance and growth.
“The ARC Fund continues to have a healthy deal flow pipeline”.
ARC Investments is a subsidiary of African Rainbow Capital which in turn is a wholly owned subsidiary of UbuntuBotho Investments.
ARC has made various investments since 2015 and has sold these investments to ARC Investments as part of the listing process.
The company has made more than 40 investments in portfolio companies since its formation in 2015 to the date of transfer to ARC Investments.”
During this period, ARC acquired interests in businesses in specific financial and non-financial industries – with the objective and firm belief that empowerment would enhance the competitiveness of the business.”
The group said that the sluggish economy has hit some of the fund’s portfolio companies but it was expected these investments would show improved performance in the second half of the reporting period owing to improved political landscape and revised economic outlook for the country in the medium term.