MARC HASENFUSS: Sitting pretty? Or sold out too soon?

Mad global conflict and tension at the Fish Hoek tennis club. It’s enough to put a man over the edge. The final match of the season for the illustrious Mixed A team was the traditionally tricky encounter with the University of Cape Town (UCT), which can vary vastly in strength depending on the time of year.

I prefer my skirmishes early in the season when the students have either not returned en masse to campus or figured out their best combinations from the new intake. UCT can be a handful late in the season when they are desperately fighting to get off the bottom of the table. In any event, it was a must-win encounter for both teams.

Disappointingly, I could not coax any of the students into pre-match libations. Students have certainly changed their ways since my days at Rhodes in the mid-1980s. But I was fortunately paired with the impeccable “Loop-en-Val” — so named after a painfully funny effort to push-start the barman’s bakkie in an inebriated state one dark night in a potholed parking lot.

We were up against a pair of strapping young lads, whose warm-up regime left us breathless and, frankly, rather intimidated. The usual formula followed: take the net, retake the net and retake the net again … which backfired spectacularly when, on the opening point, one of the UCT lads fired no fewer than seven net-skimming Scud missiles before nonchalantly flicking one down the tram.

So once more into the trenches, slowing the game down to a snail’s pace and dragging the Power Rangers deep into the gutter. Ugly enough to make me wonder why I still play tennis. But the scorecard looked beautiful.

Speaking of which, shareholders in Reinet, the Rupert family-controlled investment vehicle, must also be delighted at an attractive outcome for the group’s biggest investment. That said, shareholders might have been a tad jittery over the past few weeks with tensions flaring in the Middle East and surrounds. Epoch-making events have a habit of snagging and unravelling the best-laid plans. Just think of the handful of deals that were delayed and then set aside by the pandemic.

Reinet first announced its intention to dispose of its majority stake in UK-based financial services business Pension Insurance Corporation (PensCorp) in mid-2025. Plenty of choppy water has flushed under the bridge since then, and the flare-up of hostilities in the Middle East has certainly rippled ominously through the world’s equity markets.

I might not have been entirely surprised if the buyers of PensCorp — European savings and retirement services group Athora Holding — had abandoned the transaction. Perhaps the devil in the detail precluded any reneging … I don’t know. Still, I am in two minds about the sale.

Epoch-making events have a habit of snagging and unravelling the best-laid plans.

PensCorp, for those who need reminding, plays in what has become a fairly lucrative pension reinsurance market in the UK. The company provides pension insurance buyouts and buy-ins to the trustees and sponsors of UK defined benefit pension schemes and has carved a formidable presence in this niche. Athora CEO Mike Wells gushes about plans to “expand PensCorp’s capacity to serve trustees seeking to secure pension risk transfer solutions, while providing the resources to support other ongoing growth initiatives across Europe”.

PensCorp is still churning encouragingly and is now paying healthy dividends — though there might be an inclination to argue that Reinet has done well to capitalise on the group’s fast-growing formative years. PensCorp’s full-year 2025 financial results are out next week and should be interesting to scan. The last set of interim results showed it completed £1.1bn of new business compared with £3bn in the previous interim period.

At the interim stage PensCorp estimated the UK pension reinsurance market to be worth between £40bn and £45bn. But it also looks like a more competitive market. Significantly, PensCorp reported that the contractual service margin was £75m compared with £103m in 2024, with adjusted operating profit before tax slinking down slightly to £314m (previously £326m).

The interim dividend payout was a generous £160m — which must have made Reinet’s parting all the more difficult. The Rupert family has in the past taken the option of retaining a smaller strategic stake in a larger business — like British American Tobacco (BAT) and more recently Heineken Beverages. I’m not sure there was an option to swap up its stake in PensCorp into a meaningful equity holding in Athora, but Reinet has done very well out of the investment.

In fact, based on an initial investment of £1.1bn and collective dividends of more than £500m, PensCorp is right up there with the best investments made by the Ruperts since the early 1990s. The bottom line is that very soon Reinet will collect about £2.9bn, or €3.4bn. Before the financial year to end-March closes out, Reinet will have around €5.5bn, or R106bn, in cash.

Cash will represent more than 80% of the portfolio value, with Reinet giving no clear indication of what it intends to do with this enormous cash pile. For context, Reinet has enough cash to acquire all the fintech businesses on the JSE — Weaver, Optasia, Lesaka, WeBuyCars and Araxi — and still have more than half its cash pile left for other capital allocation considerations.

Reinet’s cash pile, believe it or not, is larger than corporate cousin Remgro’s current market value. At this point the market is quite expectant. Reinet’s discount to NAV has narrowed to about 17% — far better than the 30%-50% discount ranges applied to other significant investment company listings on the JSE.

I suspect Reinet will be inclined to sit on its cash pile for a bit, though it’s difficult to argue against paying at least a token special dividend to shareholders. But with geopolitical gyrations likely to rattle investment sentiment worldwide, it seems prudent to retain a well-reinforced war chest. You never know what bombed-out opportunities might pop up in the next few months.