Hendrik du Toit, CEO of investment company Ninety One, is surviving the lockdown on his estate in the English countryside of Buckinghamshire, an hour west of London. "It’s a nice place to get caught during a lockdown," he says. "I bought it in 2008 when no-one else wanted to live outside London."
From there, he’s marshalling not just a company with R2.29-trillion in assets, but also one crazy enough to list on the JSE and the London Stock Exchange on March 16, in the middle of the Covid-19 pandemic. And yet, Ninety One’s share price has soared a remarkable 39% since its debut.
For many people, this would already be one too many balls in the air. But Du Toit, a marathon runner, surfer and triathlete, famously doesn’t know when he should be beat.
Bernard Kantor, who hired him from Old Mutual to start Investec Asset Management in 1991, told the FM once that Du Toit is "impossible to manage — and even that can be considered something of an understatement".
Even hiring Du Toit in the first place was a herculean task. "He said no," Kantor later recalled. "In the evenings at this time, we’ll find him surfing. I went to Fish Hoek or Muizenberg and I waited at the water until he came out with his surfboard, and I cornered him," he said.
Even once he’d bitten, Du Toit refused to come to Investec’s office in Joburg. So the company grew in Cape Town, expanding its original R34m in funds to R2.29-trillion, before rebranding as Ninety One and splitting from Investec.
And Du Toit is never short of ideas. This week Ninety One, along with private equity group Ethos, launched something of a global first: a R10bn "recovery fund" to help SA companies remain productive and keep people employed.
It’s an odd structure: it’s not a bailout fund picking up companies on the cheap, nor is it a conventional private equity fund looking for undervalued companies either, since it is looking to support companies struggling to survive Covid-19.
Du Toit says it’s something of a hybrid. "One could fit it into the ESG [environmental, social and governance] bucket since we’re putting money into companies to make a real-world impact, and provide what society needs right now."
That social problem is that unlike countries like the US or UK, where citizens have been given economic security through furlough schemes, SA’s cash-strapped government doesn’t have the money to do this. This suggests massive unemployment — beyond 50% of the workforce — looms.
SA needs a project-by-project approach, which will give entrepreneurs the confidence to start businesses
Du Toit says he’s not worried about large companies like the banks, which can access the capital markets, while the National Treasury’s R200bn loan guarantee scheme will help companies with revenues below R300m per year.
"We’re worried about companies with revenues larger than R300m, which can’t access long-term bank credit or issue a bond or equity efficiently. We want to help them avoid financial distress and unnecessary job cuts," he says.
The idea is to prevent them from permanently losing productive capacity. There are companies in the hospitality industry that come to mind: hotel groups and restaurants particularly, as well as companies like Comair and FlySafair.
It may not work, but Du Toit says it will "make a real difference to people who would otherwise lose their jobs".
He speaks about the psychological effect of allowing otherwise solid companies to collapse in a country where entrepreneurs are struggling for motivation. "There are a lot of management teams struggling to find the energy to come back from this. Entrepreneurs are browbeaten and tired. They’re drifting away. And there’s a high degree of fear, which means we risk missing the upturn after this," he says.
Is this not also an attempt to show the government that financiers are willing to address real-world problems, partly to ward off the prospect of prescribed assets, in which the state forces funds to invest in state-run companies?
It is, and it isn’t, says Du Toit. He says the finance industry "needs to prove our value to society", otherwise dim ideas like prescribed assets will take hold. "We don’t need to be regulated into responding. Companies like to use fancy language about alpha and betas, but we can make a difference to real-world problems. Tesla, for example, is a market solution to the public problem of climate change."
But it also comes at a precarious time, philosophically, for the economy. Last week, the ANC released an "economic reconstruction" document, which shows the party is reverting to a more statist command-and-control model, where it may be far more inclined to impose dolt-headed rules on pension funds. It’s muddled thinking, says Du Toit.
"People say this works in China, but China has a very competent state and a large private sector. Our state has proved that it’s not that competent. They should step back, and focus on what they ought to: providing things like basic infrastructure, education and security."
Nor does he believe the private sector needs to be forced to deploy pension funds to invest in the large infrastructure projects President Cyril Ramaphosa seems to believe represent SA’s "New Deal" style route out of Covid-19.
"There’s more than enough money for infrastructure projects, but the problem is there are no projects to invest in because there’s not enough business confidence. The government must make the rules clear about projects in, say, water or power, and the money will come," he says.
Rather than lofty statements soured by archaic ideology, what SA needs is a project-by-project approach, which will give entrepreneurs the confidence to start businesses. "We have a moment here, over the next 12 months: we’re either going to take up the challenge as a country, or we’re going to have a long, slow process where our motivation as a society and our belief will remain at a very low level," he says.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.