Bulls n Bears Entrepreneurship Zone :: Due Diligence: ‘Spreadsheets are always wrong,’ says private equity boss

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Old Mutual Private Equity (OMPE) is one of South Africa’s largest and most
established private equity managers. It has successfully invested over
US$670m (R9bn) and returned more than $1.15bn (R15.4bn) to investors since
2004. Michael Avery sat down with Jacci Myburgh, head of OMPE.


1. Explain your investment philosophy.


Our investment philosophy at OMPE could probably best be described as
partnering with people (management teams, founders, fellow shareholders and
other stakeholders) we like, trust and admire with the objective of building
great outcomes for our investors. Investing is about a lot of things:
understanding the environment and broader cycles; identifying great
businesses; executing sharply, discerning clearly between value and price;
and bringing years of experience and considerable skill to bear in
formulating and executing on strategies designed to enhance and improve
business outcomes. But ultimately we find it’s about utilising our
perspective and partnering successfully with top calibre people in achieving
the desired outcomes for our investors.


2. What is the greatest investment lesson you’ve learnt?


My greatest lesson is probably that the more lessons you’ve learnt the
better you become at this. Experience helps. Perspective helps. A true
partnership mentality is very valuable. A healthy dose of humility is a good
thing. Also, I suppose that as in life, we see things in private equity go
in cycles – they don’t repeat but they rhyme. We believe that you need to
have a balance between being disciplined in your DNA and processes but be
adaptable to the environment.


3. Identify an untapped opportunity for private equity investors in Africa.


I think private equity in Africa is the opportunity. We believe that local
institutional investors are, and have been, quite underexposed to private
equity. Private equity in South Africa continues to show an outperformance
over listed equity in the long term, consistent with the experience in more
developed markets. Retirement funds in South Africa have much lower exposure
to private equity than in say the US, Europe and the UK and we think they
are missing out.


4. What is the biggest misconception about your job?


That it’s glamorous. It certainly is incredibly stimulating and
multifaceted, combining investment nous, deal-making, strategy and the
ability to influence – so you need lots of IQ and EQ. But it’s also just
very hard work and considerable resilience is required alongside a long-term
outlook and patience. One turns over lots of rocks and kisses lots of frogs
and can work on something for years that comes to nothing. It’s not an
instant gratification game but the opposite – patience, resilience, hard
work and deep thought is ultimately rewarded.


5. Name the one deal you wish you invested in.


Apple 10 years ago! I will take the Fifth here and say that being invested
in our own four funds over the last 14 years have been highly satisfactory –
for ourselves and our investors.


6. What are the skills you need to succeed as a private equity investor in
Africa?


Firstly, you need to understand your environment. We don’t think the
suitcase approach works – it typically works better if you’re operating in
your back yard where anyone is a phone call away. Again, patience and
resilience are important. Spreadsheets are always wrong and things hardly
ever turn out perfectly. So you need to be able to roll with the punches and
keep making the right decisions in difficult times.—Howwemadeitinafrica 



Jacci Myburgh

 

Invest Wisely!

Bulls n Bears 

 

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