The appointment of Brazilian Fabricio Bloisi as CEO of South Africa’s biggest company by market cap raises questions about whether South Africa has the talent pool to fill such a role.
On one level Bloisi can be seen as a younger version of group chair Koos Bekker, who is seen by many as the architect of the internet-focused giants that Naspers and Prosus are today.
Bloisi is the founder of Movile and CEO of Prosus’s Latin American food delivery business, iFood. He acquired iFood in 2013 when it was a 20-person start-up and has since grown it — rapidly and profitably — to Brazil’s leading food delivery company.
Prosus took full control of iFood for €1.5bn in 2022.
Bekker, himself a former Naspers CEO, has been involved in the founding of several local companies that have gone on to become billion-dollar entities, including MultiChoice and MTN, the continent’s biggest pay-TV and telecom operator, respectively.
His masterstroke, though, was Naspers’s $34m purchase in 2001 of a little under half of Tencent, then an up-and-coming Chinese tech firm. That investment has paid dividends many times that, fuelling the group’s more than $100bn valuation.
South Africa has a track record of breeding some of the world’s best-rated executives; former Glencore CEO Ivan Glasenberg and former MTN boss Rob Shuter spring to mind. The missing piece, it seems, is those who have presided over unicorns — privately held start-ups valued at more than $1bn. (Think Mark Shuttleworth or Elon Musk.)
Added to this is experience in a number of geographies, particularly in emerging markets. As Matt Swart, equity analyst at PSG Wealth, puts it: “There is a talented pool of South African CEOs who are leveraging technology to grow their businesses. However, the investment opportunities for the group are largely ex-South Africa, so global experience is important.”
Bekker had previously told investors that Naspers/Prosus wanted to balance operational experience with improved capital allocation when thinking about its next leader, prompting many observers to believe Ervin Tu, an American and the interim CEO after the departure of Bob van Dijk, would get the job.
But according to Peter Takaendesa, head of equities at Mergence Investment Managers, Tu “lacked the former but is liked by the market for the latter, especially deploying all proceeds from selling Tencent into the open-ended share buyback programme”.
“We therefore think the board has balanced the equation by retaining [Tu] as the president and chief investment officer of the group ... It is still not clear to us how the responsibilities between the president and new CEO will be handled in practice.”
Naspers ceased to be a South African company years ago in many investors’ minds, and that has been emphasised by the decision to list Prosus on the Euronext as well as having most decisions now coming from Amsterdam, even though the group’s headquarters are still in Cape Town.
“I don’t think nationality is a deciding factor,” Philip Short, portfolio manager at Flagship Asset Management, tells the FM. “Prosus/Naspers, though founded in South Africa, isn’t a South African company any more. It derives a negligible amount of revenue from South Africa.
“South Africa has great business leaders and entrepreneurs but Fabricio, via iFood, has been part of Naspers/Prosus for more than a decade. The board obviously got to know him over the years and he must’ve proven his worth.”
Overall, markets appear to understand the group’s rationale and are grateful to management for bringing certainty regarding its leadership.
Takaendesa says the market is perhaps a bit concerned that Prosus will shift back to burning cash in start-ups given the new CEO’s background, “but we believe the continuation of the open-ended share buybacks and commitment to improved profitability in existing consolidated e-commerce assets should continue to support the narrowing of the discount to NAV for Prosus/Naspers”.
The group, meanwhile, has stated that its strategic goals remain unchanged and that it is on target to deliver on its commitments, including a trading profit at its consolidated e-commerce portfolio during the second half of the 2024 financial year.
“Fabricio is a proven entrepreneur and innovator with deep roots in operating, building and scaling world-class technology companies within growth markets,” it said in a note to investors on Friday.
And the Brazilian signalled a greater focus on AI, the hottest trend globally in technology right now.
“I believe we are in an amazing moment, where technology disruption can change the life of billions of people for the better,” he said. “A company like Prosus must play an important role in identifying new technologies, such as AI, that affect the world and specifically emerging markets.
“Our focus on innovation and discipline, combined with our outstanding people, knowledge and culture, is a recipe for better experiences for our customers, opportunities for employees and better results for our shareholders long into the future.”
SaltLight Capital portfolio manager David Eborall posted on X that the executive reshuffle was not a bad move, but noted: “Bob was a management consultant. Fabricio is an operator. The only concern is that you have the operator at #1 and the capital allocator at #2 in an investment holding company. Are the problems sitting in the OpCos [operating companies]?”
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