overview of the strategic plan
DESCRIPTION
Overview of the Strategic Plan. 2008 - 2011. Presentation to the Portfolio Committee on Trade and Industry 5 March 2008. 1. Presenters. Ms Philisiwe Buthelezi Chief Executive Officer ( Telephone +27 11 305 8000/ 8147 (Manager in the CEOs Office: Emma Riley) Mr. Andrew Wright - PowerPoint PPT PresentationTRANSCRIPT
Overview of the Strategic Plan
2008 - 2011Presentation to the Portfolio Committee on Trade and Industry5 March 2008
1
Presenters
Ms Philisiwe ButheleziChief Executive Officer(Telephone +27 11 305 8000/ 8147 (Manager in the CEOs Office: Emma Riley)
Mr. Andrew Wright Chief Operating Officer (COO)
Mr. Frencel GillionChief Investment Officer (CIO)
Mr. Moemise MotsepeManager: Marketing & Communications
Ms Hlengiwe MakhatiniPre-Investment Manager
2
“The National Empowerment Fund(NEF) is the catalyst of
broad- based Black Economic
Empowerment in South Africa.
3
Mission Statement
We enable, develop, promote and implement innovative investment and transformation solutions to advance sustainable Black economic participation.”
NEF Mandate
Main objective To be a catalyst in facilitating economic equality and transformation
Development focus Maximise the empowerment dividend
Driven by
Current market needs Broad-based empowerment charters Government policy and sectoral charters (Industrial Policy) Addressing past failures of BEE structures Broad Based BEE Codes of Good Practice
4
Key Objectives of the NEF
5
Promote and support business ventures pioneered and run by black people;
Promote the understanding of equity ownership among black people;
Provide black people with direct and indirect opportunities to acquire share interests in State Owned and private business enterprises;
Encourage and promote investments, savings and meaningful economic participation among black people.
Key Objectives of the NEF Strategic Plan
6
To create a prudently and effectively managed fund with a time horizon of at least 10 years;
To ensure broad-based and sustainable empowerment; To act as a catalyst to stimulating Broad Based BEE and hence
economic growth; To avoid duplicating existing offerings by other operating Development
Finance Institutions (DFIs); To work in partnership with both public and private sectors; To maximise the empowerment dividend in lieu of the financial
dividend; To protect the capital base of the NEF and provide a real return.
7
“The Empowerment Dividend”
Broad Based Black Economic EmpowermentOwnership, management control, employment equity, skills etc
Black Women Empowerment
Job Creation
Growth Sectors
Geographic Spread
Investment Return
The assessment of impact is not driven only by financial returns but by measurement in terms of “The Empowerment Dividend” made up as follows:
NEF’s Performance Criteria –
Provincial Roundtables
With effect from October 2007, NEF has launched Provincial Roundtables with stakeholders in the following provinces:
KZN North West Limpopo
The NEF has so far participated in Provincial Roundtables in Northern Cape (12 December 2007) and North West (7 March 2008)
Objective is to optimise regional invested portfolio through intensive local interaction and communication
Stakeholders include: MECs for Finance & Economic Affairs, as well as MECs for Agriculture, to encourage rural and community development Constituency Members of Parliament Local Development Finance Institutions (DFIs) Local entrepreneurs and co-operatives Mass Media
Mpumalanga Northern Cape Free State
8
9
Strategic Initiatives
NEF, in 2006/7, reached two significant and strategic milestones in its history since its establishment:
On-going track record achieved in the Fund Management Division, with approvals to date now exceeding R600m;
Asset Management Division was able to obtain the overall approval for the NEF’s first BEE Retail Product, Asonge, subsequently launched on 25 June 2007.
10
NEF work in progress: 55 transactions worth R 993 million
NEF Invested Process Report31 January 2008
ENQUIRIES
Approx.28,664
APPLICATIONS
5,908
NEW DEALS ACCEPTED
24worth
R 344m
DUE DILIGENCE
18worth
R 404m
APPROVED
13worth
R 245m
DISBURSED (INCL. UNDRAWN CAPITAL)
102worth
R 631m
11
NEF Approved & Disbursed Deals by Value1 April 2007 - 31 January 2008
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
350,000,000
400,000,000
Apr-07
May-07
Jun-0
7Ju
l-07
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
Jan-0
8
R 363m
R 135m
Accumulative Value of Deals Approved Accumulative Value of Deals Disbursed
12
NEF Approved & Disbursed Deals by Number1 April 2007 - 31 January 2008
0
5
10
15
20
25
Apr-07
May-07
Jun-0
7Ju
l-07
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
Jan-0
8
23
16
Accumulative Value of Deals Approved Accumulative Value of Deals Disbursed
13
FMD Portfolio by Sector by Value31 January 2008
ICT & Media14.3%
Engineering1.5%
Manufacturing8.3%
Transportation5.2%
MiningServices
7.4%
PrintingServices
2.5%
MotorIndustry
1.8%
Tourism & Entertainment
7.4%Wood & Paper
Industry2.0%Chemicals &
Pharmaceuticals5.4%
Construction25.6%
FinancialServices
1.1%
Other0.1%
Food & Agro Processing
12.9%
Services3.1%
Textile Industry1.8%
14
Asset Management Division
Through its Asset Management Division, the NEF: Promotes the understanding of equity ownership among black people Provides black people with direct and indirect opportunities to acquire
shares in State Owned and private business enterprises Encourages and promote investments, savings and meaningful
economic participation amongst black people
It is specifically to address the above objectives that the NEF Asonge Share Scheme was conceived, designed, launched, implemented,
subscribed for and now allocated to its beneficiaries.
Asset Management Division
15
Subscriptions by Value
16
100%R 889,058,857.00100% 85,314
4.61%R 40,988,400.000.48% 410 90001 to 100000
0.05%R 446,000.000.01% 5 80001 to 90000
0.18%R 1,641,220.000.02% 21 70001 to 80000
0.24%R 2,147,282.000.04% 37 50001 to 60000
0.12%R 1,102,484.000.02% 16 60001 to 70000
39.77%R 353,604,161.008.31% 7,091 40001 to 50000
4.30%R 38,256,743.001.17% 998 30001 to 40000
8.34%R 74,163,562.003.18% 2,717 20001 to 30000
12.57%R 111,795,894.007.38% 6,297 10001 to 20000
12.84%R 114,196,042.0014.81% 12,637 5001 to 10000
16.95%R 150,717,069.0064.57% 55,085 2000 to 5000
%age TOTAL VALUE %age TOTAL APPLICANTS INVESTMENT
“The NEF Asonge Share Scheme”
Asset Management Division –Enabling Legislation
17
NEF Act (No.105 of 1998) – Objects of the NEF Trust
Policy Framework for an Accelerated Agenda for the Restructuring of State-owned Enterprises (August 2000) – requirement of the NEF to broaden empowerment with State Owned Commercial Enterprise (SOCE) allocations through individual & collective share ownership
Cabinet Memorandum No. 32 of 29 November 2000, which was adopted on 6 December 2000 – SOCE equity allocations nominated for transfer to NEF
Asset Management Division – Designated State Allocated Investments
18
Asset Shareholding % Status
1. MTN Group 1.5 received by NEF
2. Telkom 5 not yet received3. SAA 5 not yet
received4. ACSA 10 not yet received5. Connex Travel 10 received by
NEF6. Viamax 10 not yet received7. Syncat 10 not yet received8. Transwerk Perway 10 not yet
received9. Sentech 10 not yet received10. Uthingo 5 received by NEF11. SAFCOL 10 in discussion
Ensure that new products are aimed at accessible subscription levels and structures so that lower income groups are not excluded
Address geographic access to product offerings through targeted communication campaigns, engagement with provincial government and existing Asonge share register
Capitalise on the Asonge share register with future offers allowing investors to diversify and extend the reach of future offers through this channel
19
Key Strategic Interventionsfor NEF Asset Management
On-going track record achieved in the Fund Management Division, with approvals to date now exceeding R600m.
20
Fund Management Division
21
Fund Management Strategy– Strategic Drivers
PROCESSES MARKETING HUMAN CAPITAL• Streamline investment reports
• Refine investment processes
• Establish post investment as separate unit – freeing resources
• Strengthen due diligence processes
• Compile Investment Manual
• Coordinated marketing strategy
• Develop partnership
• Pro-active Business Development
• Enhance NEF brand awareness
• Deepening skills base
• Encourage team work
• Build sector expertise
• Key recruitments
• Performance management focus
• Retention strategy
• Ongoing training
22
Fund Management Strategy– Strategic Drivers contd
RISK MGMT PARTNERSHIPS PORTFOLIO MGMT• Strengthen due diligence
process
• Restructure post investment
• Establish portfolio limits to reduce over exposure
• Institutionalize investment process – Investment
Manual
• Refine investment products / Criteria
• Build partnerships with banks, DFI’s, Private Equity firms
• Explore non-financial support partnerships
• Explore co-funding opportunities in large transactions
• Enterprise Development partnerships with corporates
• Portfolio allocation to reduce risk
• Portfolio Management Committee
• Dedicated Portfolio Management Unit
• Mentorship programmes
• Work-out Unit
23
FMD Portfolio by Stage of Investment31 January 2008
(R) Value
R138mR103mR390m
R631m
% By Value
21.9%16.2%61.8%
100%
By Number
552918
102
% By Number
53.9% 28.4% 17.6%
100%
Early Stage
Development Stage
Later Stage
Budget 2008/9
24
Consolidated Budgetfor the years 2007 - 2011
25
R1 042m R 1 377m R1 632mR 1 970mR 315mTOTAL SURPLUS
R1 377m R1 632m R1 970m
Including
proceeds of the Asonge
Share Scheme
R 1 631mR 290mSurplus brought
forward
(R 335m) (R 255m) (R 338m) R 339mR 25m
Surplus/ (Application of
Surplus)
R765m R123m R 685m R 114m R 650mR107m R 270mR 75mActual/Budgeted
Spending
R 430mR 123mR 430mR 114mR 312mR 107mR 609mR 100mBudget Approved
CapitalOperationsCapitalOperationsCapitalOperationsCapitalOperations
2010/11 (MTEF)2009/10 (MTEF)2008/9 (MTEF)2007/08 (actual)
We thank you for your attention.
www.nefcorp.co.za
26
Appendices
Fund Management Activity Reports for the year to date 2007/8
27
28
NEF work in progress: 55 transactions worth R 993 million
NEF Invested Process Report31 January 2008
ENQUIRIES
Approx.28,664
APPLICATIONS
5,908
NEW DEALS ACCEPTED
24worth
R 344m
DUE DILIGENCE
18worth
R 404m
APPROVED
13worth
R 245m
DISBURSED (INCL. UNDRAWN CAPITAL)
102worth
R 631m
29
FMD Invested Process Report31 January 2008
iMbewu Fund
Corporate Fund
Since inception to31 January 2008
INFORMATION MANAGEMENT
SYSTEM
NEW DEALS ACCEPTED
24worth
R344m
14worth
R 132m
10worth
R 212m
DUE DILIGENCE
18worth
R 404m
11worth
R 140m
7worth
R 264m
APPROVED
13worth
R 245m
8worth
R 85m
5worth
R 160m
WORK IN PROGRESS
55worth
R 993m
33worth
R 357m
22worth
R 636m
iMbewu Fund Disbursed
Corporate Fund Disbursed
DISBURSED(INCLUDING UNDRAWN
CAPITAL)
102worth
R 631m
70worth
R 158.7m
32worth
R 472.5m
iMbewu Fund - Work in Progress
Corporate Fund - Work in Progress
30
FMD Approved & Disbursed Deals by Value31 January 2008
0
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
700,000,000
800,000,000
900,000,000
1,000,000,000
Mar-03
Jun-0
3
Sep-03
Dec-03
Mar-04
Jun-0
4
Sep-04
Dec-04
Mar-05
Jun-0
5
Sep-05
Dec-05
Mar-06
Jun-0
6
Sep-06
Dec-06
Mar-07
Jun-0
7
Sep-07
Dec-07
R 943m
R 631m
Accumulative Value of Deals Approved Accumulative Value of Deals Disbursed
31
FMD Portfolio by Stage of Investment31 January 2008
(R) Value
R138mR103mR390m
R631m
% By Value
21.9%16.2%61.8%
100%
By Number
552918
102
% By Number
53.9% 28.4% 17.6%
100%
Early Stage
Development Stage
Later Stage
32
FMD Portfolio by Product by Value
Entrepreneurship Fund14.1%Expansion
Capital0.0%Capital
Market10.2%
Franchise3.9%
Liquidity & Warehousing
13.8%
Procurement8.5%
Rural &Community
3.3%
ProjectFinance
3.8%Acquisition Funding42.4%
31 January 2008
33
FMD Portfolio by Sector by Value31 January 2008
ICT & Media14.3%
Engineering1.5%
Manufacturing8.3%
Transportation5.2%
MiningServices
7.4%
PrintingServices
2.5%
MotorIndustry
1.8%
Tourism & Entertainment
7.4%Wood & Paper
Industry2.0%Chemicals &
Pharmaceuticals5.4%
Construction25.6%
FinancialServices
1.1%
Other0.1%
Food & Agro Processing
12.9%
Services3.1%
Textile Industry1.8%
34
FMD Portfolio by Region by Value31 January 2008
Gauteng46.6%
Limpopo0.5%
Western Cape22.7%
Mpumalanga4.2%
Eastern Cape17.3%
Kwa-ZuluNatal9.0%
FreeState0.0%
35
FMD Portfolio by Region by Number31 January 2008
Kwa-ZuluNatal10.3%
Gauteng59.8%
Free State1.0%
Eastern Cape8.8%
Mpumalanga2.0%
Western Cape15.7%
Limpopo2.9%
36
Job Creation Statistics31 December 2007
Existing Jobs
New Jobs
RandPer Job
Number of Jobs
RandInvested
2,210 1,402 808 121,248
4,507 4,444 63 14,220
1,079 265 814 82,275
267,957,806
64,087,480
88,774,575
286 70 216 86,825
1,172 892 280 74,386
947 265 682 56,585
24,832,020
87,180,000
53,586,432
891 274 617 27,071
807 0 807
24,120,130
20,819,000
Acquisition Funding
Capital Market
Entrepreneurship Fund
Franchise
Liquidity & Warehousing
Procurement
Project Finance
Rural & Community
11,899 7,612 4,287 53,060 631,357,443
64% 36%
TOTAL PORTFOLIO: