Business Maverick

RESTRUCTURING TRANSACTION

Out with Kagiso Asset Management, in with Camissa

Out with Kagiso Asset Management, in with Camissa
Kagiso Asset Management CEO Roland Greaver. (Photo: Supplied)

Cape Town-based Kagiso Asset Management is changing its name and identity as its key shareholder bows out and new ones take centre stage.

Kagiso Tiso Holdings (KTH), the investment arm of the Kagiso Trust and Tiso Foundation, has sold its majority stake in Kagiso Asset Management (KAM) as it restructures its investment portfolio to hold fewer, bigger investments, bringing an end to a fruitful 20-year relationship.  

The restructuring transaction sees it sell its 50.1% share in the business to a combination of KAM management and staff, and Sinayo Capital, a women’s investment group that has multiple interests across the financial services industry. 

KAM’s management and staff have taken control of the business, with a 74% joint shareholding, and Sinayo Capital owns a substantial minority stake of 26%. 

“It is important for staff to be able to control their own destiny in high IP companies like ours,” says Roland Greaver, who co-founded the business with Gavin Wood 20 years ago.

At the time they were backed by Coronation and KTH, with Coronation exiting its investment five years later in 2005.

“We wanted to expand our shareholding so that we could broaden our staff shareholding — this is important if you are to retain staff during the tough times, which are inevitable in markets,” he adds. 

With the exit of the majority shareholder, KAM will change its name to Camissa Asset Management. Camissa is an ancient Khoi name for Cape Town, where KAM’s head office is located, and means “Place of Sweet Waters”, in reference to the streams that flow down from Table Mountain. 

KAM’s existing Level 1 B-BBEE credentials will be boosted by the increased direct black female ownership. The business is now 30% owned by black women, via Sinayo Capital and the Martha Molobi Women’s Trust, which was named after the wife of the late Eric Molobi — the founding chairman of KAM. The trust owns 4% of KAM and its beneficiaries will exclusively be black female KAM management and staff.  

While management is now the majority shareholder, and firmly in charge of its own destiny, the asset manager’s ambitions remain the same. 

We are on a steep growth trajectory and plan to double our assets under management from R50-billion to R100-billion,” Greaver says.  

But growth will not come at all costs. KAM, or Camissa as it will shortly be known, will remain a mid-sized asset manager. “We do not want to grow too large for the SA equity market as this will limit us to the JSE Top 40.” 

There are some high-quality listed companies in the midcap space, companies like Omnia, Curro and Datatec, that are essentially too small for SA’s giant asset managers to invest in. 

“Being able to invest in these companies is an important differentiator,” Greaver says. “South Africa’s equity market is very concentrated — there have been so many delistings that it makes the investment universe challenging. When it comes to investing in SA equities, we need to remain nimble.”  

Kagiso’s flagship equity fund, the Kagiso Equity Alpha Fund, has an 18-year track record and has managed returns of 16.7% over the period — a very solid track record and one that management, understandably, wants to maintain. 

Of course, when it comes to other fund classes — fixed income, multi-asset funds, or offshore equities, where there are no liquidity issues and other impediments, there is no limit to the capital allocation, Greaver says. DM/BM

 

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