By: Jean-Pierre Du Plessis
On the domestic front, economic growth remains elusive
with electricity supply and infrastructural constraints.
Adding further challenges to domestic companies,
we are seeing companies with any vulnerabilities such
as weaker balance sheets
or no strategic competitive edges under pressure
and taking strain at the moment.
In our view, a strategy focused on investing in best in
class companies is highly appropriate at present.
Following The acquisition of Rootstock last year,
and with the worldwide flexible fund added
to our product offering, it was decided
that the Stomach Fleming equity prescient fund would focus
and invest solely in JSE listed equities.
This meant that the historical 20% allocation
to the Global Best Ideas Fund was sold down
during the course of the second quarter 2023.
There's been no change to the investment philosophy.
Our focus, as always, is on identifying
and investing in best in class companies.
We apply the same approach
as our global best ideas colleagues.
We look for sustainable growth prospects,
healthy cash flow generation, quality management teams,
and high levels efficiencies in our investee companies.
Following the refinement in the strategy,
it's been an active period for the fund
with five new high quality infusions
and three companies making way in line with our guidance
of holding between 20 and 30 companies at any time.
We currently own 22 companies at an average weighting
of 4.4%.
From a geographical diversification point of view, on a C
through basis, approximately 45%
of the fund's revenues generated offshore.