“ 57% of clients rate their broker's service as excellent, up from 40% last year ”

- 2017 Top Stockbrokers survey

“ 6% of stockbroker clients execute trades worth more than R100,000 a month ”

- 2017 Top Stockbrokers survey

“ 40% of stockbroker clients average monthly trades of R5,000 or less ”

- 2017 Top Stockbrokers survey

“ 52% of clients have assets under management of between R1m and R3m ”

- 2018 Top Private Banks & Wealth Managers Survey

“ 39% of wealth clients have been with the same firm for more than 10 years ”

- 2018 Top Private Banks & Wealth Managers Survey

“ Of the 100 largest JSE-listed companies, 87 conducted BEE deals, 35 of which included public benefit organisations ”

- 2017 Empowerment Endowment

“ R32.6bn in endowments are now held by foundations set up as a result of BEE deals that will support charitable activities ”

- 2017 Empowerment Endowment

“ 50% of clients rate their wealth manager as excellent and 31% as very good ”

- 2018 Top Private Banks & Wealth Managers Survey

“ 33% of clients rate the value for money they get from wealth managers as excellent, against 18% for transactional banking ”

- 2018 Top Private Banks & Wealth Managers Survey

“ R51.6bn value created specifically for charitable recipients through BEE deals ”

- 2017 Empowerment Endowment

“ 81% of clients are very likely or extremely likely to recommend their wealth manager to friends of family ”

- 2018 Top Private Banks & Wealth Managers Survey
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2018 SAVCA Industry Awards

The Southern African Venture Capital and Private Equity Association (SAVCA) announced the winners of the inaugural SAVCA Industry Awards at a gala dinner at Montecasino on 8 November 2018.

 
Intellidex conducted the research for the process, contacting private equity and venture capitalist companies to submit nominee companies for the awards. After assessing the data, Intellidex presented a short list of finalists to the panel of judges, including an information pack on each company.

 
SAVCA is the industry body and public policy advocate for private equity and venture capital in Southern Africa. It represents about R165bn in assets under management through 170 members that form part of the private equity and venture capital ecosystem.

 
The objective of the awards was to recognise the portfolio companies that have thrived from private equity and venture capital investment. The awards also promote the positive impact that businesses have on job creation and the economy.

 
The 2018 SAVCA Industry Best Small Company final nominees were: i-PAY, Sweep South and UCOOK. The Best Medium-Sized Company final nominees were: Royal Schools, Tessara and Vumatel. The Best Large Company final nominees were Fidelity Security, Kwikot and Tsebo Solutions Group.

 

2018 SAVCA Industry Award for Best Small Company: SweepSouth
SweepSouth is an on-demand online platform for booking home cleaning services by connecting households with domestic workers. Nominated by the Vumela Fund, managed by Edge Growth, SweepSouth has grown from just three domestic workers and two co-founders when the business started in 2014, to employ 38 people in-house and 8,000 “SweepStars” across South Africa.

 
2018 SAVCA Industry Award for Best Medium-Sized Company: Vumatel
Vumatel is a provider of fibre-to-home and internet services. Vumatel was nominated by Vantage Capital for the role it has played in providing connectivity, and the job opportunities the company has created. Vumatel’s staff complement has increased to 660 permanent staff and 4,000 contractors used.

 
2018 SAVCA Industry Award for Best Large Company: Tsebo Solutions Group
Nominated by Rockwood, Tsebo Solutions Group is South Africa’s third-largest outsourced services provider in catering and facilities management. It operates in 27 countries with five service lines and over 39,000 employees.

 
Click here to find out more about The Southern African Venture Capital and Private Equity Association.

The Empowerment Report

The Empowerment Report, produced by Intellidex in partnership with Empowerdex and Independent Media, appeared in Business Report on 1 November. It is the authoritative ranking of all JSE-listed companies according to their black economic empowerment scores.

Every year we recognise those companies that have attained the highest rankings overall and in the various BEE subcategories, while also tracking industries operating under their sector codes. Since the revised 2013 Codes of Good Practice were implemented, we have run two sets of tables to cover companies that have converted as well as those still operating under the 2007 codes.

The BEE landscape has undergone numerous significant changes in the past year, some welcome, some controversial.

The most positive is the gazetting of a Mining Charter that appears to be acceptable to government and business. As with any industry, policy certainty is paramount. Without it, no major investment in the battered industry will take place.

Government has also introduced proposed legislation on a new scheme that is proving rather contentious. It plans to extend the BBBEE exemption that companies with annual turnover of below R50m enjoy to all companies with direct black ownership between 51% and 99%. They would be classified as level two contributors to BEE and would be exonerated from other empowerment requirements. Companies with 100% direct black ownership are automatically granted level one status.

The third initiative has been widely welcomed. The Youth Employment Services (YES) aims to create 1-million paid internships for black youth, with incentives for absorbing interns into full employment. Formulated by business, labour and government, it has the necessary support to be a success.

Another contentious issue has been bubbling quietly under the surface for some time now. The Broad-Based Black Economic Empowerment Commission insists that what should be classified as regular corporate social investment initiatives are being presented as BEE trusts or foundations and are incorrectly claiming BEE socioeconomic development scores for them. The commission argues that the intervention must assist historically disadvantaged people to become economically active. A mobile clinic for HIV treatment, for example, or donating blankets or shoes to schools cannot score a company BEE points because it is not making anyone economically active.

Critics argue that this is a misinterpretation, and that such trusts are recognized by the trade and industry department’s BEE codes and by the Mining Charter.

This could boil over: many companies have invested heavily in trusts that are doing important and good work in uplifting the impoverished and improving the quality of their education and health services, among others.

Click here for the full Empowerment Report, including the rankings.

The Future of Energy

Intellidex’s The Future of Energy, a 36-page full colour supplement, was distributed in Business Day on 30 October 2018. It assesses SA’s energy sector, focusing on the state of the renewable energy industry. This is the second publication produced by Intellidex on this sector. The first, Five Years of Renewable Energy, came out two years ago when the environment was dramatically different.

Then, excitement was in the air: a new industry was being developed, new businesses were starting up as a result, foreign companies were pouring investment into the country.

Pride was also prevalent. From a base of zero, 6,800MW of energy capacity had been procured through four bid windows, with a third of that already contributing to the grid. For the first time, significant amounts of power were being generated by independent producers. State utility Eskom still holds a strangling grip on SA’s energy sector, but a chink had been cleaved out of its monopoly.

The process had been conducted professionally by the Independent Power Producer (IPP) Office, a unit jointly set up by the energy department and National Treasury. Extremely strict security protocols and levels of efficiency that are not exactly the hallmarks of other governmental departments won the IPP Office high praise.

That, and the falling prices that resulted from the auction process in which IPPs bid for prices at which they will supply electricity to Eskom, produced the sincerest form of flattery: countries across the globe emulated the IPP Office’s processes.

Mike Peo, Nedbank’s infrastructure head, said at the time: “There’s no question about it: at every international conference on energy, SA is being widely acknowledged as having the most successful renewable energy programme ever undertaken.”

That first publication celebrated this success. It remains a remarkable achievement for a country beset by so many socioeconomic problems.

As we were going to print with it, however, there were already rumblings from discontented quarters. Eskom started raising various objections to signing the power purchase agreements with the IPPs from round four, confusing its own financial difficulties with the financing of the IPPs. Its objections, despite contradicting cabinet-level decisions, created serious delays. Compounding the issue was then-president Jacob Zuma’s nuclear ambitions and a belief that the IPPs somehow undermined them, stopped the industry’s development in its tracks.

Today, the renewable energy programme is back on track but the environment is starkly different.

Back then there was perhaps a naivety in the sense of achievement in that there was little understanding of the extent of damage a few corrupt people in powerful positions could cause in pursuing nefarious agendas. Today that awareness is acute, honed by the near death of SA’s renewables industry.

There is now a growing sense of confidence at having overcome those travails. Having been so close to the brink, things are up and running again. But there is cautiousness too; an awareness of how quickly things can change, of how close the industry came to being permanently stunted. The excited teenager has matured into more world-weary adult, albeit one whose confidence in its abilities has been honed by its past successes, both in developing an efficient industry and in overcoming its political struggle for survival.

“When we started with renewables we just jumped in and swam,” says Karén Breytenbach, who as head of the IPP Office has overseen the entire renewable energy process. “Now we know; we have learnt. We need to be ready for what is coming, not just jump in.”

Much of the credit for rejuvenating the renewables programme can go to Energy Minister Jeff Radebe. He wasted little time in getting Eskom to sign the round four procurement agreements with the IPPs, notwithstanding continuing resistance from the utility – which introduced an element of absurd hilarity. Last-minute court applications failed to stop the process but Eskom continued to prevaricate and delay, right up to the signing ceremony. First they said they had no mandate to sign, which was immediately dismissed as nonsense. Then they tried to renegotiate prices and were again rebuffed. Finally, at the signing ceremony, the appointed Eskom official shifted in his seat patting pockets, saying he couldn’t sign as he had no pen. The minister, with alacrity, produced one from his jacket pocket.

Those 27 round four projects, Radebe announced at the signing, will inject R56m of new investment into the economy, put downward pressure on the end price of electricity and provide 61,600 full-time jobs of which 95% are for South African citizens, mostly during the construction phase. The local community equity shareholding in the 27 projects amounts to 7.1% or R1.6bn-worth, and those shareholders are likely to receive R5.9bn in dividends over the 20-year lifespan of the projects. Another R9,8bn will be spent on socioeconomic development initiatives and R3.4bn on enterprise development over the 20-year contract periods.

Radebe’s next big achievement has been the publishing of the draft Integrated Resource Plan (IRP) 2018, again in the face of resistance, this time spearheaded by the National Union of Mineworkers. That maps a path for South Africa’s energy future and instils a sense of certainty in the industry. Investment decisions can be made accordingly.

The main focus of this publication is on the future of energy in SA. It’s an exciting time: the IRP opens the way for independent power producers within coal and gas, introducing new elements of competition for Eskom. Indeed, the future structure of Eskom is pivotal to the future shape of the industry, and we explore options that might improve operational efficiency and financial sustainability. And the renewables industry itself is ever-evolving, with technological advancements and falling costs making it a compelling solution to the ever-increasing urgency with which planet Earth has to address the consequences of global warming.

Click here for the full publication.