Asset Management

Targets for the Asset Management Division (AMD) were set in the context of the approval of further retail investment products, the implementation of the investor education initiative and the successful transfer of further identified State Allocated Investments (SAIs). Some work was also planned for the conceptualisation and development of an Enterprise Development fund in line with the principles of the Codes of Good Practice and based on the input from the Board of Trustees in the 2007/8 strategic planning session, for feedback in the 2008/9 strategic planning session.

A number of SAIs were to be housed under custody of the NEF for eventual transfer to Black people to fulfil a key part of the NEF mandate which is to create equity ownership opportunities to Black people from these SAIs.

The first of these transfers took place in July 2007 under the auspices of the highly successful NEF Asonge Share Scheme, which saw about 86 000 investors buying in excess of 12 million shares currently worth R1.4 billion, in a public share offer that was oversubscribed by 13%.

A supplier has been appointed through a public tender process to manage the national investor education campaign which will focus on broader investor education themes such as: (i) illiquid equities; (ii) equities; (iii) unit trusts; and (iv) all manner of debt instruments over and above the Asonge Share Scheme. This campaign will result in 74 workshops nationwide where members of the public, and in particular poorer residents of the townships and villages of our land, will be encouraged to save and invest.

The campaign thus far has resulted in 5.7% of the Asonge investors selling their acquired shares with most clearly awaiting the full two- year term in anticipation of the bonus share award in September 2009, guaranteed at an additional bonus share for every 10 held at the time. In spite of the economic downturn, this investment has grown by 63.9% (as at 7 July 2009) in value.

The AMD has also concluded the design of an additional retail product targeting the transformation of the retail sector with the dti and an entrepreneur. Significant progress has been made on the transfer of the South African Forestry Company Limited (SAFCOL) equity allocations with several submissions being made to the Department of Public Enterprises and being largely accepted for the imminent transfer of the forestry stakes into an SPV trust.

Shortly after the end of the year under review, the Cabinet announced the historic and significant decision to increase the NEF’s shareholding in the national lottery operator, Gidani, from 5% to an allocation of 10%.

The NEF welcomed this important decision as a vote of confidence by government in the ability of the NEF to continue fulfilling its mandate of bringing more South Africans into the economic mainstream, as a means to redress the historical legacies of racially-based economic disadvantage. To date the AMD has engaged the dti on this allocation, and is presently at the memorandum of understanding phase and is moving rapidly toward the transfer of the allocated shares onto the books of the NEF.

Through AMD’s retail product development, the NEF will structure mechanisms around the Gidani allocation to facilitate the transfer of real economic benefits of holding this equity stake. These benefits will be destined for broad-based Black beneficiary participation that can significantly improve the lives or prospects of those in our targeted communities through the following three mechanisms:

• Enhancement of Black public share offers distribution network.
• The provision of access to communications technologies in rural areas.
• Provision of bursaries and scholarship funding in support skills development in the Information Communication Technology (ICT) sector.

The Retail Integration Programme is presently at the feasibility stage with strategic partners in place. This programme will see Black consumers acquiring equity ownership in the retail sector. This initiative is aimed at unlocking value and creating wealth for Black consumers through equity ownership as well as assisting the retailers with transformation issues.

The NEF played a key role as a strategic advisor to SASOL on its first Black Public Offer, yet another milestone that has confirmed the NEF as an authority and market leader and maker in Black Public Retail Offers.

The AMD, along with Strategy and Planning, has an active research department that will continue to push the boundaries of understanding with respect to the effect economic variables have on BB-BEE, the effectiveness of NEF interventions concerning the Empowerment Dividend and wealth creation for Black people as this relates to Black public share offers, and delving into market trends that can serve as indicators for identification of opportunities for NEF to act as an advisor and/or BEE facilitator.