Since our investment, this business has shown:
|Implied value||R38 billion||R38 billion||−|
|Earnings||R1 983 million||R1 346 million||47%|
|Headline earnings||R1 985 million||R1 388 million||43%|
|Normalised earnings||R1 985 million||R1 388 million||43%|
|Dividends paid||R1 267 million||R1 073 million||18%|
OUTsurance is a direct personal lines and small business short-term insurer. In addition, its South African direct life insurance business continues to gain traction.
Youi, the group’s direct personal lines initiative in Australia, has achieved scale and is trading profitably. Youi New Zealand was launched in July 2014 and provides personal lines insurance cover directly to the New Zealand public.
OUTsurance’s business model is built on a philosophy of scientific underwriting and pricing, innovative product design, a robust and efficient information technology platform and a high performance culture driven by great people.
The client-centric business strategy to provide value for money insurance and exceptional client service continues to drive consistent shareholder returns.
On 23 August 2016, RMI anounced the sale of RMBSI to Santam. RMI aims to be an active, long–term, value–adding shareholder. Due to a changing regulatory environment and the evolving strategic objectives of RMBSI, RMI believed RMBSI would be optimally positioned within a larger insurance group. RMI and RMBSI shared a successful 23 year partnership achieving an internal rate of return in excess of 60%.
RMI Investment Managers follows the affiliate and specialist model of asset management:
RMI Investment Managers is well placed to be a shareholder and partner of choice for independent asset managers and investment talent since we are independent, have patient and permanent capital and a solid reputation of backing entrepreneurs to build businesses in financial services.
RMI Investment Managers will add value to these affiliates and specialist investment teams through strategic support; an alignment of interest between ourselves, management shareholders and clients; financial capital; operational expertise and distribution capabilities such as our distribution partnership with MMI.
As a result, RMI is actively seeking to fund and scale new and disruptive business models. In order to facilitate this, RMI has launched its next-generation business platform, AlphaCode, to help identify and enable key investments that may change the landscape of the financial services industry.
Next-generation financial services
With the rise of financial technology (fintech) in South Africa, a number of investors and players have positioned themselves in the market to support and fund entrepreneurs. RMI’s next-generation business platform, AlphaCode, continues to progress on its strategy of identifying, partnering and growing extraordinary next-generation financial services entrepreneurs. AlphaCode currently has 53 businesses as members operating across the financial services spectrum, with many exploiting leading-edge technology to transform the delivery of financial services. Merchant Capital is a diamond member, which is the highest membership, with five more businesses on platinum membership. These businesses have close working relationships with the RMI investment team.
AlphaCode is committed to building the broader entrepreneurial sector by supporting high-impact black entrepreneurs, providing mentorship, free office space and support facilities and actively engaging with higher learning institutions and entrepreneurial industry organisations and lobby groups.
AlphaCode has become an innovation hub for the RMI portfolio companies and has created value by facilitating and hosting projects and proof of concepts between its members and RMI’s portfolio companies. RMI has also built a strong pipeline of potential investment opportunities from the member base, with the goal remaining to build a diversified portfolio of superior entrepreneur-led, early-stage fintech businesses that have achieved market traction and are poised for rapid growth.
RMI made its first investment in a disruptive, next generation financial services business by taking a 25% stake in Merchant Capital, a provider of alternative sources of working capital for small and medium enterprises (SMEs) in South Africa in September 2015. Merchant Capital was founded in 2012 in response to the lack of funding options available to SMEs. Using innovative technology, Merchant Capital’s model allows its clients to repay their loans based on the cyclical nature of their businesses.
Merchant Capital’s short-term strategy entails solidifying the South African core business and operating platform. The business continues to launch new products and partnerships to further differentiate the product and grow the client base.