There is hardly another African entrepreneur that has founded so many leading companies than Johann Rupert. His name is associated with Richemont, Remgro, Reinet, First Rand Bank and others. Should investors follow his investments?
Capital News Africa: From the trading floor – Week 7-2023
Subscribe for free: https://capitalnewsafrica.com
In late January, Reinet Investment SCA, which is listed on the Luxembourg bourse (ISIN: LU0383812293), released a remarkable report. The investment firm said its net asset value increased to EUR 31.88 per share at the end of December from EUR 29.93 at the end of September. That reflects an increase of 6.5% for the three-month period, which is impressive considering that European share markets were bearish in the fourth quarter.
Reinet’s improved net asset value was the result of an increase in the worth of two of its holdings, namely British American Tobacco (BAT, ISIN: GB0002875704) and Pension Insurance Corp. (unlisted). While Reinet is listed in Europe, its many African investments make it a company that is also closely watched on the Johannesburg Stock Exchange (JSE).
Another reason why Reinet is closely watched has of course to do with its founder and chairman Johann Rupert. Born in 1950 to a well-to-do family in Stellenbosch near Cape Town, Rupert has become one of South Africa’s most successful entrepreneurs. Rupert’s father Anton (1916-2006) was successful in his own right, having built his wealth on cigarettes that, initially, he himself rolled in a garage.
Upon his death at the age of 90, Anton Rupert left to his family the Rembrandt Group, which also owned the eponymous South African cigarette brand. By then, Rembrandt was the owner of the international cigarette brand Rothmans International, which eventually was sold to British American Tobacco (BAT). Through Reinet, the Rupert family retains a sizable stake in BAT. Anton Rupert also acquired the South African wine estates L’Ormarin and La Motte as well as a stake in the winery Rupert & Rothschild Vignerons.
Moreover, the Rembrandt Group went beyond wine, spirits and cigarettes to diversify into a host of businesses. In 1988, the group was split into two investment companies based in Switzerland. They are Remgro (ISIN: ZAE000026480) and Compagnie Financière de Richemont (ISIN: CH0210483332). Here is an overview of their many business interests currently:
Johann Rupert could have become wealthy from the investments made by his father alone. But since taking over the family empire, Johann has sold off several holdings and acquired new ones. His personal wealth is estimated at EUR 1 billion currently.
After completing university, Johann worked in New York for Chase Manhattan, which today belongs to JP Morgan, as well as for the investment bank Lazard Frères. He returned to South Africa in 1979 and founded his first business, namely Rand Merchant Bank. It was renamed First Rand in 1998.
The list of Rupert’s board mandates reflects that he still holds to a tight routine. He is, at the same time, chairman of Remgro; executive chairman of Compagnie Financière de Richemont; as well as a board member at Rembrandt Trust, Anton Rupert Trust and Rupert Beleggings. Beyond this, Rupert is a managing partner of Compagnie Financière Rupert SA.
Johann Rupert’s succession is still unclear
Given his success, some readers might be wondering if they should follow his investments. The question is difficult to answer, as investors should not just follow but work out their own strategy. That said, it is a fact that Johann and Anton Rupert belong to Africa’s most successful investors and entrepreneurs. So paying attention to their work is always advisable.
The Ruperts’ success is due in part to having brought a large part of the family business to Switzerland. This diversification makes it even more resilient in times of crises. On the other hand, investors should be aware that it is as yet unclear who will succeed Johann Rupert, who is 72. It is also unclear whether that successor could continue the success of the Rupert family empire for the next generation and beyond.