JSE-listed investment company Ethos Capital Partners modestly increased its total assets to R2-billion and its net asset value a share to R11.48 for the six months ended December 31.
During the period under review, the economic outlook in South Africa was characterised by significant structural and growth impediments. Consumer sentiment and business confidence remained depressed and gross domestic product growth rates continued to underperform market expectations, the company noted in a statement on Thursday.
Industrial output had also been subdued, with many corporates choosing to delay investment and expansion pending further clarity of key sectoral policies.
An unexpected resumption in load-shedding in December also negatively impacted on both consumer and business confidence which was felt across almost all of Ethos Capital's South African portfolio companies.
While this is likely to continue over the medium term, strong economic growth across many other sub-Saharan African countries has continued. which positively impacted those assets which had exposure to such countries, the company pointed out on Thursday.
During the period, the company invested R200-million, largely into four acquisitions within the existing portfolio and thereby increasing its invested capital to R1.7-billion, 85.5% of total assets.
The investments provide exposure to 19 portfolio companies operating in sub-Saharan Africa.
Meanwhile, in February, the company successfully completed a R750-million fully underwritten rights offer at R7.50 apiece to fund its participation in the Brait rights offer.
It undertook this as it believed it to be a unique investment offer. It was indicated that Ethos Private Equity would assume the role as the adviser to the Brait board on the overall portfolio value optimisation and maximisation strategy pursuant to an advisory agreement with Brait.
In March 2020, Ethos took over as the investment adviser to the Brait board. This increased both the group's total assets and invested capital to R2.7-billion, expanding the investments further to 24 portfolio companies with a wide geographical spread.
Given the uncertain economic outlook, the board believes that remaining focused on the company’s strategy of theme/tailwind-led investing and leveraging the sector, value add and domain expertise it has, while exercising price discipline, will result in strong investment returns in excess of the company's cost of equity.