Overview

As a BEE pioneer, KTI has evolved over the past few years from a typical opportunistic BEE investor to becoming a strategic investor and shareholder. KTI is of the view that in order to survive in the era beyond BEE, black-owned companies need to move away from opportunistic trading in assets, and should instead seek to exert influence over core strategic holdings where they can demonstrate expertise. To this end,

KTI is consolidating its businesses around three pillars:

• Financial services
• Industrial and ICT
• Resources.

Kagiso Ventures (KV) is the core investment management entity of KTI, leading the development of its industrial pillar. This cluster houses all of the group’s industrial and ICT assets.

Shift in investment philosophy

KTI’s investment philosophy has evolved to investing in businesses over which it has management control, or is able to exert significant influence. During the past few years, KTI has substantially grown its own balance sheet, enabling it to procure “on-balance-sheet” funding for investments in selected transactions. This marks a fundamental shift in the group’s philosophy in a move towards longer-term strategic investments.

Key strategic drivers behind the re-positioning

• Structural and management re-engineering
• Clustering businesses into segments led by dedicated specialist executives
• Acquisition of targeted enterprises in selected segments to build at scale
• Pursuit of controlling stakes in current and prospective investments
• Effective capital management
• Clarity of vision
• Alignment of structure with strategy at all levels
• An entrepreneurial working environment
• Clear internal and external communication.

A focused approach

Within this strategic framework, the industrial pillar has been split into 3 logical and complimentary clusters:

(i) Media and ICT

(ii) Services

(iii) Power and industrial

What sets Kagiso apart

• Long-term strategic investor, with a deep knowledge and understanding of the commercial space
• A unique grouping that is not only broad-based, but also has the ability to fund transactions from its own resources
• An active investor with a proven track record of providing strategic leadership, business acumen and defined operational involvement
• Ability to assist partner companies in expanding market shares, with particular reference to synergies with other KV investments.

The Kagiso proposition

Kagiso’s value proposition in respect of its investments is based on the following building blocks:

A selection of KV’s previous transactions in the industrial and ICT sectors

Some of the significant transactions that the group has concluded over the past 14 years include:

• The creation of Kagiso Media, a listed black-owned diversified media group
• 35 percent of debis Fleet Management, a leading vehicle fleet management company
• 25.1 percent of Waco Africa, the largest scaffolding rental and specialised erection services company in the country
• 22.5 percent of Alstom SA, an electrical equipment supplier
• 27 percent of Bytes Technology Group SA, one of South Africa’s leading information and office technology groups
• 7.5 percent of Macsteel, the leading steel merchant in the country
• 22.5 percent of Bell Equipment Sales SA, a leading earthmoving equipment company.