REMGRO, the investment giant controlled by the Rupert family, has tweaked its strategy on China to take longer-term positions in opportunities, it emerged at an annual general meeting on Monday.
Responding to questions from shareholder activist Theo Botha about Remgro’s participation in the China-focused investment fund Milestone, chairman Johann Rupert said a new arrangement was in place to allow Remgro to participate in the longer term in promising Chinese businesses.
The original Milestone funds, Mr Rupert explained, were a combination of venture capital investing and private equity positions in mainly consumer-linked Chinese companies. This meant individual investments were sold off after five to seven years.
Instead of Milestone selling off its better investments, it has been arranged for participants to be granted a right to certain fund investments on an equal basis, Mr Rupert said.
Remgro has traditionally been a long-term investor, and its revised Chinese investment endeavours now reflect this. The annual report shows a 36.1% holding in new Chinese investment vehicle Milestone Capital Strategic Holdings.
Remgro CEO Jannie Durand said the Milestone 1 fund investments had already been realised, while Milestone II was in the process of being realised. Remgro had committed $100m to the Milestone funds with a $23m commitment remaining.
Mr Rupert said the Milestone funds had seen good returns — although he was "less inclined" than some Remgro directors to commit further capital. "I am the one that keeps kicking (director) Dilly Malherbe’s backside, saying returns must go up."
Mr Botha queried whether Remgro should exit noncore and underperforming entities. Mr Rupert said Remgro had sold off assets in which no further value could be added or where attractive exits were possible.
"We are not wedded to our investments. We had a view on mining, and we sold our investment in Impala Platinum.…"
Johann Rupert. Picture: SUNDAY TIMES
REMGRO, the investment giant controlled by the Rupert family, has tweaked its strategy on China to take longer-term positions in opportunities, it emerged at an annual general meeting on Monday.
Responding to questions from shareholder activist Theo Botha about Remgro’s participation in the China-focused investment fund Milestone, chairman Johann Rupert said a new arrangement was in place to allow Remgro to participate in the longer term in promising Chinese businesses.
The original Milestone funds, Mr Rupert explained, were a combination of venture capital investing and private equity positions in mainly consumer-linked Chinese companies. This meant individual investments were sold off after five to seven years.
Instead of Milestone selling off its better investments, it has been arranged for participants to be granted a right to certain fund investments on an equal basis, Mr Rupert said.
Remgro has traditionally been a long-term investor, and its revised Chinese investment endeavours now reflect this. The annual report shows a 36.1% holding in new Chinese investment vehicle Milestone Capital Strategic Holdings.
Remgro CEO Jannie Durand said the Milestone 1 fund investments had already been realised, while Milestone II was in the process of being realised. Remgro had committed $100m to the Milestone funds with a $23m commitment remaining.
Mr Rupert said the Milestone funds had seen good returns — although he was "less inclined" than some Remgro directors to commit further capital. "I am the one that keeps kicking (director) Dilly Malherbe’s backside, saying returns must go up."
Mr Botha queried whether Remgro should exit noncore and underperforming entities. Mr Rupert said Remgro had sold off assets in which no further value could be added or where attractive exits were possible.
"We are not wedded to our investments. We had a view on mining, and we sold our investment in Impala Platinum.…"
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