Kagiso Capital is Kagiso Charitable Trust’s (KCT) investment vehicle and has the sole objective of ensuring that the KCT assets are diversified and able to provide KCT with sustained funding to support their community development projects. Before KC, KCT established Kagiso Trust Investments (KTI) that later became Kagiso Tiso Holdings (KTH) in 2010 after a merger with Tiso Investment Holdings. KTH saw varying levels of success and was not primarily banked by RMB. In 2012, Kagiso Capital was established and RMB naturally became a trusted adviser and funder.

Kagiso Capital HoldCo facility

The RMB deal team has been a committed funding partner to KC’s balance sheet requirements and has successfully participated in all 3 rounds of balance sheet funding raised to date. In 2012, RMB helped facilitate KC’s increased investment into KTH, following the merger in 2010, by providing them with a balance sheet facility.  KTH used the proceeds of this equity injection to increase and diversify the asset base at that level. RMB has since been an instrumental advisor in the subsequent 2 rounds of refinance implemented for the KC balance sheet in 2015 and most recently in 2019. KC enlisted the services of RMB as advisor to lead the process of raising a balance sheet facility of R1.5bn from the market in 2019 as part of the balance sheet refinance and creating additional headroom for acquisitions to grow the portfolio. This has placed KC in a good position to actively engage the market on strategic acquisitions and opportunities as they may arise over the short to medium term.

Phuthuma Nathi

The RMB deal team approach Kagiso Capital with an investment proposition on Phuthuma Nathi (PN). In particular, RMB had an off-market funding package to help KC purchase PN shares. PN is the BEE scheme for Multichoice South Africa, meaning that only qualifying black investors can purchase shares in the scheme. RMB had been monitoring the performance of this scheme over 4- 5 years before approaching KC. The deal team put together the research we had compiled on the stock and scheduled some time with the KC management team to discuss the investment.

The KC deal team interrogated the research and asked RMB to come back with terms on the proposed funding on the investment. The difficulty however stemmed from the ability to source shares in the open market. In short, there are more people looking to buy these shares than there are people willing to sell. The RMB role on the investment then expanded to market maker for KC. RMB has been sourcing, negotiating and purchasing blocks of shares for KC to buy for over 2 years, which has culminated in KC being the largest shareholder of PN shares outside of Multichoice Group – the holding company.

RMB has provided significant funding for KC’s shares.  This is a share covered deal on a very illiquid stock which is unprecedented in the share cover funding space. The facility was designed to be flexible around the availability of PN shares in the market. RMB assisted them in sourcing shares through several block trades.

Growthpoint Healthcare

RMB introduced KC to a property investment in a specialized healthcare REIT. This Growthpoint Healthcare Property Holdings (“GHPH”) investment opportunity was the first of its kind in South Africa and effectively gave KC access to a unique investment opportunity in a defensive segment of the economy, with attractive returns. KC has invested a considerable amount in the GHPH and is one of the largest investors in the REIT and is expected to a partnership that has worked well given that the The partnership between KC and GHPH is flourishing as the clients share core values and principles. This transaction sees two key clients in GHPH and KC, working hand in hand to grow value.

Post KC’s investment in the GHPH the portfolio has grown from 5 assets to 6 assets with the 7^th acquisition looming.