Weak pound clobbers Rupert family’s fortune
Reinet, the international investment company controlled by the Rupert family, said on Wednesday that a weaker pound destroyed more than €600m (R10bn) in value of some of its biggest investments, including British American Tobacco (BAT).
The decline of the pound against the euro was the main factor behind declines of €551m (R9.9bn) and €56m, respectively, in the net asset value (NAV) of its investments in UK-based financial services group Pension Insurance Corporation (PensCorp) — its biggest asset — and BAT for the six months to end-September, the group said.
Total NAV fell 7.6% to €5.44bn, or €29.93 a share.
“Reinet records its assets and liabilities in euro; the weakening of sterling against the euro, offset by the strengthening of the dollar against the euro has resulted in an overall decrease in the value of certain assets and liabilities in euro terms,” Reinet said.
The group, valued at about R57.45bn on the JSE, was established after the Rupert family’s Remgro and Richemont businesses were restructured in 2008 and is regarded as a conservative investment fund that aims to preserve capital.
PensCorp comprises just more that 40% of Reinet’s asset value, BAT almost one-third, and private equity and related partnerships account for the remainder. Reinet holds a 49.5% stake in unlisted PensCorp and 2.15% in BAT.
Despite the setback, the company increased its dividend 12% year on year to €50.9m, or €0.28 a share.
The drop in NAV was partly offset by €61m in dividends it received from BAT and increases in the fair value of Trilantic Capital Partners, TruArc Partners, Asian private equity companies and portfolio funds.
UKRAINE WAR
Reinet said that the war in Ukraine triggered high inflation and market volatility, and affected global energy supplies, but said it has no direct exposure to Russia or Ukraine.
“Discussions have taken place with fund managers and investee companies to determine any significant changes in value and any impacts related to Covid-19, the Ukraine crisis, volatility in stock and currency markets, interest rates and inflation,” it said.
THE WAR IN UKRAINE HAS TRIGGERED HIGH INFLATION AND MARKET VOLATILITY, AND AFFECTED ENERGY SUPPLIES