Investment Advisor

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Since 1 March 2020, Ethos Private Equity Proprietary Limited ("EPE") has been the contracted investment Advisor to the Group. An investment services agreement contracted with BML details the terms by which EPE provides the requisite investment advisory and administration services on a non-discretionary basis. EPE has an established track record of generating realised returns for investors, leveraging its execution capability and exit track record to execute the Company’s strategy to unlock value for stakeholders through asset monetisation over the period to 2025.
EPE Direct Investments GP Proprietary Limited and Ethos Fund VII GP (SA) Proprietary Limited, affiliates of EPE, collectively own 12.3% of Brait’s ordinary shares and 12.3% of the BIH Exchangeable Bonds issued in December 2021. EPE owns 1.2% of the BIH Exchangeable Bonds.
 

Key principles of the investment services agreement between BML and EPE:

Three-year tenor, with an annual renewal thereafter at an initial cost of R100 million per annum, with inflation linked increases;
EPE provides accounting, administration, corporate finance, investment advisory, investor relations and general corporate secretarial services to BML;
The Board and EPE have undertaken to assess on an annual basis the appropriateness of the annual cost in the context of the resources required to implement the strategic business plans for that year.
As a result of the impact of Coronavirus and in line with the principles above:
In FY21 EPE voluntarily reduced the advisory fee to R91 million in response to the Covid pandemic. In recognition of the challenging environment due to Covid and the restructuring of the Brait cost base, EPE volunteered to retain this fee level for FY22 (compared to the contracted value of R105 million).
In FY23, the advisory fee is set at R96 million (compared to a contracted value of R110 million).
The Board has approved a 1-year extension of the EPE advisory contract to 31 March 2024 at a fee of R65 million.
 

About the investment advisor, EPE:

EPE was established in 1984 and was instrumental in establishing the private equity asset class in South Africa. EPE has a strong track record of generating superior returns across multiple economic and political cycles. In the last few years EPE has successfully evolved its strategy, redefining its identity as it seeks to become one of the African continent’s leading alternative asset investors. This diversification strategy has led to the launch of Artificial Intelligence, Mezzanine and Mid-Market Funds, as well as the JSE listing of Ethos Capital.
EPE’s investment activities are led by highly experienced private equity and mezzanine teams, comprising more than 20 partners. The partners have collectively been with EPE for over 200 years and are backed by a number of additional investment professionals, providing deep private equity expertise and strong resources to support transaction activity. The team is defined by a high-performance culture and characterised by local insights with international reach.
 
For more information on Ethos, including profiles of the senior members of the investment advisory team, please see www.ethos.co.za