Investment Approach

In order to meet internal growth targets and requirements, we seek to invest only in companies that can demonstrate a long term and sustainable ability to generate cash and deliver an acceptable return on invested equity. We have therefore developed systems and procedures in place to filter all potential investments:

Industries of Choice
Industries Outside Our Mandate

Industries of Choice

Our ability to source funding for acquisitions is crucial to us being able to meet our growth targets. Although the strength of our portfolio proves favourable when we source funding, it is clear that funding remains expensive. We minimise risk to our company balance sheet by ring-fencing acquisitions in such a way that respective investments and related risks are self-contained. This enables us to service funding obligations as and when it becomes due.

Robust due diligence process, which looks at all aspects of the targeted business. We use a combination of in-house and outsourced expertise for the due diligence function, which includes amongst other areas; finance, human resources, environmental and legal matters.
Review and approval process by the executive and management committees. This enables us to thoroughly interrogate each investment proposal, prior to it being presented to our investment committee.
Review and approval by the investment committee, the members of which are all non-executive. Only those investments which meet Thebe’s investment criteria will be acquired.

An Internal Rate of Return (IRR) of 22%. This requirement can be slightly modified if the identified investment serves as a strategic objective.
An ability to be self-funding in the case of existing businesses or the ability to reach independence with an ability to distribute cash to shareholders, within a reasonable amount of time, in the event of start-ups.
An optimal balance between shareholder cash distribution and funding growth.

Industries Outside Our Mandate

However, the Thebe Board has also dictated a list of industries that Thebe will not invest in. It is important for us to be disassociated from industries where there is a corporate consensus that these are not acceptable to society. These include amongst others:

Production or activities involving harmful or exploitative forms of forced labour or harmful child labour.
Production of or trade in any product or activity deemed illegal under host country laws or regulations or international conventions and agreements.

Production or use of or trade in hazardous materials such as radioactive materials, unbounded asbestos fibres, products containing PCBs and chemicals subject to international phase-outs or bans.
Trade in wildlife or wildlife products regulated under CITES.
Production of or trade in weapons and munitions.

Investment Approach