QUARTERLY UPDATE: 31 DECEMBER 2016

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1 +27 (021) QUARTERLY UPDATE: 31 DECEMBER 2016 Investing to grow and transform SA s insurance industry In June 2016, the Fund established an R8m investment facility to help black-owned, emergent enterprises in the Motor Body Repair (MBR) industry purchase capital equipment to expand their businesses. Since then two upcoming panel beaters have already secured funding with a third currently under consideration. Through the acquisition of additional machinery, businesses in this space are able to apply for automotive manufacturer approvals, allowing the MBR s to take on more lucrative inwarranty repair and insurance work. Deals of this nature fall firmly into the Fund s type 1 category, namely impact investments generating positive social benefit, through job creation and revenue enhancement, due to the relative developmental nature of many of the investee companies, and the strong supply chain links. These impact type deals, whilst generating relatively low expected internal rate of return, have been significantly derisked through a combination of either matched DTI grant funding or off-take agreements with listed corporates within the insurance industry. The Fund's MBR investment facility seeks to invest up to R800, 000 per panel beater, with the focus of the fund now being to create a pipeline of further potential investees. This investment facility, together with the Fund s Accelerator Programmes, will go a long way in addressing a considerable pain point in the short-term insurance space, namely finding quality transformed Motor Body Repairers to procure from.

2 Fund invests in black-owned private equity manager The Fund is excited to announce its recent investment into Bopa Moruo, a 100% blackowned private equity fund management business. Founded in 2012 by experienced private equity professionals, Nthime Khoele and Tumi Tlhabanelo, Bopa Moruo have successfully raised R300 million from RMB Ventures into their first fund and have since made three investments into high growth potential businesses: AutoTrader.co.za, South Africa s pre-eminent vehicle listings business; WACO Africa, a leading provider of industrial products and services; and One Digital Media, a leading provider of digital signage products and services to the retail sector. The current management team consists of the two co-founders and Yvonne Maitin, a recent addition, who together have extensive experience in private equity investment management gained at Brait Private Equity, Development Partners International ( DPI ) and Actis. The Fund s investment will be used by Bopa Moruo to scale its team and operational infrastructure. This will aid the business in achieving its targets to deploy the remaining capital in its first fund whilst simultaneously raising capital into a larger, second fund with a more commercial mandate. We believe that this investment is an excellent opportunity for the Fund not only on the basis of solid growth potential and economic returns, but also in terms of supporting transformation in the financial services sector. Furthermore, we are confident that Bopa Moruo will serve as an exceptional strategic partner for both ASISA members and the Fund based on deal flow and co-investment opportunities, access to market and shared networks, and preferential procurement impact for our industry. View Bopa Morua s Website

3 Judante boosts profitability, expands service offering Judante s journey since the Fund s investment in 2015 has been one of expansion and intentional growth. Central to the company s success thus far has been the continued prioritization of passion, innovation, and the vision to revolutionize the building industry. The team attended a growth strategy workshop as part of the Sanlam s Accelerator Programme in 2015 where they unanimously identified a Built-in-Cupboards (BIC) capability as central to the growth trajectory of the company. The team determined that in the BIC space waiting for material delivery from suppliers was causing two major bottlenecks- slowing down the turnaround time of projects thus putting pressure on cash flow and secondly the challenge of limited quality control affecting timelines. A year later with funding secured from the Fund and clear direction from their growth strategy; the team enthusiastically began the implementation of their BIC initiative. Judante recently took occupancy of their new BIC working facility with two installation teams up and running, and plans to expand to six teams, creating several new jobs through this offering alone. The BIC initiative comes with numerous benefits including; increased profitability of approximately 25%-30%, bolstering service turnaround time, quality consistency, and diversifying the companies offering. With quality and turnaround time being key metrics in securing business in the building industry, Judante is well positioned to continue taking bold strides and further growing their market presence. View Judante s Website

4 Liberty announces 2017 programme expansion Picture Left to Right: Leon Campher (ASISA CEO), Trevor Chandler (ASISA Consultant Senior Policy Advisor), Jay Mothiram (liberty, Head of Oprations Finance, Ruth Benjamin-Swales (CEO, ASISA Foundation), Amanda Khoza (Liberty, Head of Transformation) Liberty hosted the launch event for the 2017 Blue Skies Programme in the last quarter of 2016 announcing 21 suppliers selected to receive a year of business development support. In addition to the Group s continued efforts to develop enterprise and industry, Liberty will offer an annual Competition Programme where suppliers will be given the opportunity to compete to secure non-collateral investment finance for operational capacity and business expansion. Liberty s stakeholder involvement will not only be heightened through participating in the adjudication process of the competition programme but also through supplier adoption and sponsorship - an initiative established by Liberty Procurement and Business to complement business development activities awarded through the programme. Since the start of the programme in 2014, more than 30 SMEs have received intensive business development support. In 2015 Liberty, through the Blue Skies programme, invested R46million through procurement spend, serving to create and maintain vital jobs within the industry. Amanda Khoza, Liberty s Head of Transformation and Inclusion, says, Our target for our 2017 Programme is to multiply the impact with all the suppliers participating in the programme. We may not be perfect in our Interventions but we certainly have made a difference and are heading in the right direction. Learn More

5 Momentum launches broker development initiative According to the latest South African report from the Global Entrepreneurship Monitor, the number of entrepreneurs has been on a gradual decline, during 2015 and The report revealed that the rate of budding black African entrepreneurs decreased from 85% in 2014 to 68% in Fiona Ally, Momentum s Group Lead: Enterprise and Supplier Development, says, These figures further reiterate the importance of cultivating a culture of entrepreneurship within the insurance industry, and the need to make insurance a desirable industry to attract our youth. By identifying the main challenges facing black financial intermediaries in the country, the programme s goal is to be able to support growth and to build sustainable partnerships in the hope to innovate and motivate youth to join the industry. The key focus areas that many black advisers struggle with is access to the market; building a solid book/ client-base, coupled with limited business development support from the industry, featured as being one of the main challenges slowing business and productivity down for black financial intermediaries. To address this, a rigorous selection process was followed, whereby eight black financial intermediaries were chosen to participate in the pilot programme, a combination of training workshops (boot-camps) and one-on-one mentoring, to create maximum shared value and scalable systemic change in the insurance industry. In addition to the interactive workshops, the intermediaries receive over 20 hours a month of personal mentorship from an experienced practice management professional. Through this tailored process, tools and business models are developed for each business based on their unique scenarios. The boot-camps provide an opportunity to discuss areas pertinent to their businesses and to build a sense of comradery.

6 Enterprise Profile: J & D Coachworks J&D Coachworks is a Motor Body Repair (MBR) company which was established on the 1st of August 2014 co-founded by husband and wife, Jonathan and Dawn Moore. Jonathan, a qualified panel-beater and spray-painter who has been working in the local MBR industry for over 20 years, co-founded J&D Coachworks after investing time, effort and energy utilizing his skills, talent and experience. Jonathan is a very hands-on entrepreneur, and leads his team both strategically and technically while Dawn is responsible for business administration and assist with daily operations. The company currently provides both structural and non-structural panel beating and spray painting services to the general public, insurers as well as to fleet car rental companies. J&D plans to bolster revenue growth by becoming an accredited structural repairer with select Original Equipment Manufacturers (OEMs) and South African Motor Body Repairers Association (SAMBRA) to access in-warranty and insurance work through the acquisition of stipulated capital equipment and infrastructure. View J&D s Websitess THANK YOU!