South Africa’s richest man, Johann Rupert, has had a stellar year, with his family’s wealth up more than $5bn this year, as the family closes in on breaking into the top 100 richest in the world bracket.
According to data from the Bloomberg billionaires’ index, the Rupert family added $5.3bn (R90bn) to their bounty this year, taking the family’s valuation to $18.9bn (R320bn).
The family’s wealth is a whisker away from that of media mogul Rupert Murdoch, whose family wealth is put at $19.6bn.
The listed investments of the family have rallied this year. Richemont, in which the family holds a commanding stake, has surged nearly 30%, valued at just under R2-trillion on the JSE.
The family’s investment holding company, Remgro, is up 16% this year, with a market valuation of R95bn, while Reinet is up 25%, valued at R109bn.
Earlier this year, the family ended its generational association with the tobacco industry, which played a big role in its wealth generation over the decades. In January, Reinet announced its exit from British American Tobacco (BAT), selling its 43.3-million shares for £1.221bn.
The Rupert dynasty’s association with the tobacco industry dates back to the 1940s when Anton Rupert founded the Voorbrand Tobacco Company, later known as Rembrandt. By the mid-20th century, Rembrandt had cemented its place as a top player in the industry, listing on the JSE in 1956 and branching out into banking, mining and financial services.
By 1999 the family merged his tobacco giant, then the world’s number four tobacco maker, known as Rothmans International, with BAT, the world’s second-largest cigarette producer.
Remgro has investments in companies such as Mediclinic, Heineken, RCF Foods, Rainbow Chicken, OUTsurance, TotalEnergies and eMedia, among others.
Analysts at asset management firm Allan Gray, Jonty Fish and Malwande Nkonyane, believe that Remgro and Reinet have still got a lot of value to offer investors. This is despite the two investment holding companies trading at a significant discount, with recent moves made by Remgro pointing towards a higher probability of the discount narrowing.
“These include the recent approval of the Vodacom/Maziv deal with updated terms valuing Maziv at a large premium to management’s value. Not only does this affirm Maziv’s value, but it also highlights Remgro’s tendency to value its unlisted investee companies conservatively,” they said in a note.
“Heineken Beverages is overcoming its integration issues, allowing the business to focus on reigniting growth. We think this business could be worth more than Remgro management’s current valuation.”
Earlier this month, Remgro moved to take full ownership of the Mediclinic Southern Africa business and leave full ownership of the Swiss business to its partners, Investment Holding Limited (IHL).
Remgro and IHL, which is a unit of MSC Mediterranean Shipping Company Holding, will then continue to hold their respective joint interests in the Middle East and Spire Healthcare Group Plc businesses.
On Reinet, Fish and Nkonyane said the current 33% discount to net asset value already reflects investor scepticism regarding the private equity holdings.
“In fact, the market is effectively assigning zero value to these assets. This creates a margin of safety: if the private equity funds deliver even modest returns, they could add upside without requiring a rerating of the rest of the portfolio.”
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