Alternative investment for high net-worth market

Alternative investment for high net-worth market

A closely held, highly successful investment company specialising in alternative investments with a 22 year track record is opening its doors to investors with R1 million and more to invest.

TBI Strategic Partners (TBISP) is a South African open-ended investment company established in 1995, with a focused investment mandate in the small and mid-market investment space. It is wholly owned by Trustee Board Investments (TBI).*

TBISP is wholly owned by Trustee Board Investments (TBI), and has over the past 10 year enjoyed a real return of over 25% (25.52% as at 31 December 2016). The market value of TBISP’s investable funds is currently R243 million. The company has initiated a private placement offer for the subscription of ordinary shares.

“Our objective is to expand TBISP’s long-term capital base and to give investors the opportunity to invest in the established portfolio of the company,” says Ockert Goosen, CEO of TBISP.

Goosen says the opportunity for investors is as follows:

  • Access to a previously restricted investment vehicle.
  • To invest alongside investment managers with a 22 year proven investment track record.
  • To invest at a discount to intrinsic fair value in identified new investment opportunities.
  • Significant growth opportunities in the existing portfolio.

“The proceeds of the offer will allow us to make further investments in our existing portfolio and take full advantage of other investment opportunities that we have identified,” says Goosen.

In addition to investing in target companies TBISP typically owns large enough minority interests to allow it to take advantage of any corporate actions, while helping the companies they invest in to unlock lock term-growth potential in a sustainable way.

“We provide strategic input to our investee companies, without assuming direct operational responsibility,” Goosen says

He says that one of the factors differentiating TBISP is that its shareholders have most of their personal assets invested in the company. In addition, TBISP is substantially ungeared.

In terms of investment approach, TBISP prefers to make smaller investments initially, building up its position over time as the managers come to know more about the investee company, its management, and its respective industry or environment.

The private placement offer closes on 31st May 2017. Investors will invest in ordinary shares at their net realisable asset value per share, which is determined on a quarterly basis. As this is a long-term investment, 3 years’ notice may be given by investors after 7 years. Expenses are capped at 1.5% per annum plus an annual participation dividend of 20% of the growth in investment value, subject to achieving a 10% hurdle.

TBISPs’ current investments are:

  • Efficient Group (20.01%). This listed financial services provider offers customised products, professional services and added value throughout the financial services value chain. The group has three market-focused clusters of business units focused on Financial Services, Services and Solutions and Investments. efgroup.co.za
  • Terrasan Group (12.74%). An unlisted public company, Terrasan is a leading marine farming group in South Africa. It holds extensive investments in abalone farming and in the pelagic, mussel and the related feed manufacturing industries. It owns commercial fishing rights and fishing trawlers in the pelagic fishing industry and has interests in sardine canning, freezing and fishmeal facilities. terrasan.co.za
  • Awande Capital Partners and Awande Media (30%). Awande Capital Partners is a private investment company launched in 2006. Its current major investment through Awande Media is Trudon, trudon.co.za, the publisher of the Yellow Pages. It also has an interest in 360 Financial Services Group, which comprises interests in the Doves funeral services business, Union Life, Sechaba Medical and Numsa Financial Services among others.
  • Accentuate (29.7%). This listed group and market leader provides flooring, infrastructure and maintenance solutions through its Safic Environmental Solutions division. It has an investment in Ion Exchanges Safic, a joint venture with Ion Exchange (India) that provides the full spectrum of water purification and environment solutions. accentuateltd.co.za
  • Sinetech (50%). An importer and distributor of standby and solar power producing products and one of the oldest photovoltaic (PV) solar energy companies in Southern Africa,  Sinetech has a wide product range including its own brand of Omnipower products. sinetech.co.za.