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Lereko says Nedcor is a better fit than FNB

Business Report

November 3, 2004
Sherilee Bridge

Johannesburg - Lereko Investments, the investment company headed by former politicians Popo Molefe and Valli Moosa, was more likely to buy into Nedcor or its parent, Old Mutual, than First National Bank (FNB), despite widespread market speculation to the contrary, Molefe said yesterday. Although his group had not held talks with either group, it felt Nedcor, or Old Mutual, would be a "better fit" than FNB, he said. Lereko's shareholders include Kagiso Investment Trust executive chairman Eric Molobi; former Independent Development Trust chief executive and FirstRand board member Lulu Gwagwa; and Airports Company South Africa managing director Monhla Hlahla.

Both FNB parent FirstRand and Nedcor have promised to provide details about their black economic empowerment deals by year-end. Molefe, who was speaking after a presentation of the Lereko-Metier Capital Growth Fund, said Nedcor's shares were also "cheap" and that represented a buying opportunity. The black-led private equity initiative, a partnership between Lereko and investment specialist Metier, aimed to mobilise capital for South African private equity and empowerment transactions. Building on the recent popularity of ethical and socially responsible initiatives, the fund will invest from R50 million to R500 million in equity and equity-related securities "in a way that will make a meaningful contribution to the socioeconomic transformation of the country".

A fund of this sort had not only become an imperative but presented a massive opportunity, said Moosa. "We see this fund participating in the sociopolitical transformation imperatives of the country and in general the transformation process happening in the economy," he said. Lereko's independence was one of the attractions for Metier, which was founded by former members of Brait. "The [Lereko] team does not come with any baggage, they are not associated with any one big group so we were able to start the partnership from scratch," said Paul Botha, a founder director of Metier and Molefe's defending attorney at the Delmas treason trial.

Moosa said many potential deals had passed Lereko's desk. "The one thing the fund will not be short of is exposure to deal flow," said Moosa. "We embrace empowerment and it will be embedded in our fund management activity," he said. Thierry Dalais, executive chairman of Metier, said that while the fund would target a range of opportunities including empowerment capital, its primary objective was to make superior returns in seven to 10 years.

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