INTRODUCTION AND PURPOSE
RECM and Calibre (RAC) has been set up as a long term investment company, in the form of a closed-end vehicle, which has access to permanent capital.
The ordinary shares of the company are held by executive directors: Piet Viljoen and Jan van Niekerk, as well as entities associated with them.
(Please refer to various SENS announcements for further details)
Investors were offered the opportunity to subscribe for preference shares in the company, which enables them to participate in the superior long-term growth prospects of the underlying investments of the company. Investors are afforded liquidity through the listing of the company’s preference shares on the JSE.
Regarding Capital Management (Pty) Ltd (“RECM”) and RAC Advisory (Pty) Ltd
The responsibility for the capital allocation decisions for the company is outsourced to RECM. Piet Viljoen and Jan van Niekerk take specific responsibility for these capital allocation decisions.
The controlling shareholders of RECM are Piet Viljoen, Jan van Niekerk and Theunis de Bruyn.
RECM appeals to the investor who understands that superior investment returns are likely to be generated by acquiring interests in good quality businesses at attractive prices, and then holding on to these interests for the long term.
RECM’s investment activity is grounded in the value philosophy, with an emphasis on consistently applying a sensible investment process. The investment process is a bottom up process, based on proprietary research. In addition, the investment process is risk-conscious, where risk is defined as the possibility of losing money, rather than volatility. The focus is on protecting capital, and growing it where possible and sensible. Ultimately, such an investment process relies on avoiding, as far as possible, deep draw downs of capital. It does this by only accepting investment risk where the investor is clearly being paid handsomely to do so – in other words, by only buying assets when the price is significantly below a reasonable estimation of fair value. Sources of return are thus two-fold: the movement from cheap to fair value, as well as the intrinsic growth that most good quality businesses exhibit over time. RECM believes that these are the only two sources of return that investors can access on a consistent basis.