Johannesburg - Makalani, the listed black economic empowerment (BEE) transaction financier, had increased the size of its portfolio from R521 million to R722.4 million after adding three major investments, it said in its report for the quarter to March.
The company, which specialises in BEE transactions and targeted investments that benefit communities, has a portfolio that includes financial services, resources, services and industrials.
Together with Rand Merchant Bank and Investec, the company participated in the Brait preference share issue, subscribing for R100 million worth of shares.
It issued a loan of R75 million to Shanduka Credit Services, which is part of the Shanduka Group. The loan was used to acquire shares in KreditInform, a specialist in managing and analysing databases for credit providers.
Makalani made a preference share investment of R26.4 million in Shanduka Engineering Investments, which was used to buy shares in Inyanga Consolidated Investments, an engineering and project management and process plant design firm.
Makalani chief executive Vusi Mahlangu said the company was financing its new deals from the R2.5 billion proceeds from its listing in May last year. The firm intended to deliver a return superior to the Johannesburg interbank agreed rate plus 3.5 percent. It would continue to invest across different sectors and intended to go into property.
When asked about the high premiums that empowerment entities had to pay in some deals, Mahlangu said Makalani considered the sustainability of the transaction before financing it. He did not expect a slowdown in the BEE deal flow.
He said the current level of investment was not satisfactory; he would be happy with an amount close to R2.5 billion.
For the eight months to December, Makalani achieved headline earnings of R112.6 million and a weighted average pretax yield of 13.8 percent. Headline earnings and net asset value a linked unit reached R7.21 and R103.03, respectively.
The company said business had been slower than expected, but it was optimistic.
Shares in Makalani fell 0.26 percent to R94.25 yesterday, while the equity investment instruments sector rose 1.52 percent.