National wealth and growth: Everest Wealth’s next chapter

At Everest Wealth, we believe that to be unique, you must be different. To be different, you must innovate. And to innovate, you must pioneer.

This philosophy lies at the heart of our unique offerings.

• Click here to learn more about Everest Wealth.

In an investment landscape dominated by traditional solutions, where 90% of capital flows into conventional listed assets, we identified an untapped, dynamic, and versatile private space: private equity and unlisted opportunities.

This insight enables us to build solutions with a sharper focus on:

1. Stronger diversification
2. Key performance drivers
3. Different risks and return profiles

With more than 2,000 traditional collective investment schemes dominating South Africa’s retail investment space, we quickly recognised a core issue: most fund managers are competing within the same shrinking universe of listed assets.

The Johannesburg Stock Exchange (JSE), for example, had around 600 listed companies nearly three decades ago – today, that number has more than halved.

In contrast, the unlisted universe offers a broader, more versatile opportunity set spanning multiple sectors, sub-sectors, and industries.

Allocating capital to this space means accessing truly uncorrelated investments and achieving deeper portfolio investments.

Over the past five years, this approach has allowed us to craft a forward-thinking portfolio that reflects:

• A wide range of assets across diverse sectors.
• A strategic focus on investing in or growing businesses into medium to large enterprises.
• A geographically diverse assets base, with over 40% internationalised (based on both location and revenue streams).

*Spread of top 10 assets by location and/or revenue generation

When focused on returning capital to investors, and in an era where labour and operational functions are often outsourced, we believe that the annual turnover is the most accurate measure of a business’s size.

In our portfolio, and in line with industry best practices, we defined business size to typically be as follows:

• Small business: Annual turnover of less than R20 million p.a.
• Medium business: Annual turnover between R20 million and R80 million p.a.
• Large business: Annual turnover exceeding R80 million p.a.

*Please note that these benchmarks may vary depending on the specific sector or sub-sector.

One of the key advantages of investing in private businesses is the ability to actively influence and drive asset performance.

In the listed space, fund managers are typically limited to engaging with company boards and executive teams to interpret past results and anticipate future performance.

In contrast, our approach to private equity investment allows us to participate directly in boards, management and executive teams – putting us in a position to drive performance outcome, not merely observe them.

We believe that sitting in the driver’s seat – rather than being a passenger – gives us a far greater ability to grow and optimise our investments.

The majority of listed business begin as private enterprises and choose to list in order to access greater capital to further grow.

However, once listed, the valuation of a business becomes influenced less by its actual performance and more by market sentiment – namely, the forces of supply and demand in the open market.

To illustrate this point, consider MTN, who in 2015 had a massive debacle and eventual fine in its Namibian expansion:

MTN JSE listed share price performance:

• Highest share price in 2015: 24 400c
• Peak recovery price in 2022: 19 160c
• Lowest share price during the period: 4 839c

MTN audit financial statement (AFS) performance (below)

• Consistent revenue growth over the period
• Sustained profit growth over the period
• Positive earnings per share (EPS) growth over the period

*Data sourced from MTN’s publicly available annual financial statements as well as Investing.com share price data

Summary

• The performance of MTN over this period was good, growing and well-managed
• Yet, MTN’s share price over the same period was down -80% at its lowest and down -21% even at its peak recovery

Managing the key success drivers in an unlisted business allows value to be determined based on core factors such as revenue, profit, and cash flow, rather than open market pricing.

Private vs listed equity

When comparing private equity to listed equity, it is clear that:

• One is not necessarily higher risk or higher return than the other; investors need to understand the actual portfolio composition and management strategy.
• Each asset class offers a distinct set of risks and returns, which, when combined, provide investors with a more diversified investment portfolio.

Investors themselves also vary – what constitutes a high-risk element for one may be low risk for another.

For example, consider two investors: one who requires immediate access to their investment, and another who requires a 10-year investment horizon.

Liquidity is a risk for the first investor but less so for the second.

When comparing our portfolios to the traditional Association for Savings and Investment South Africa.

(ASISA) investment categories, many of our peers, financial advisors and contracted financial service providers (FSP’s) have likened us to a Multi-asset High Equity fund.

It is important to understand that investments are not managed in a vacuum, and that:

• Investment solutions within the same risk category can carry different risks offering varying returns, tailored to meet diverse investor needs and suitability;
• Investments within the same category of portfolio can have significantly different risk ratings and returns, as each fund manager employs a unique strategy.

*As sourced from publicly available key information documents of some of the largest SA Fund Managers. For actual fund comparison, please request from Everest Wealth.

Managing the key success drivers in an investment portfolio requires a continuous and robust process.

Although past performance is not indicative of future performance, the result to date is that:

• We have on our ZAR portfolios, achieved annualised returns of 12,8% p.a. and higher over the past five years;
• We have successfully processed client maturing investments (clients who have invested for a full five-year term) to the value of R355 000 000.
• As well as additional returns (above the 12,8% annualised p.a.) to these full-term investors of over R33 000 000

Although the past five years has seen many traditional investments perform better, for instance, the JSE Top 40 generated annualised returns of over 16% p.a., during this period, our philosophy remains consistent.

We have always promoted solutions that do not necessarily aim for the highest potential return. Instead, our focus is on building portfolios designed to minimise volatility and drawdowns.

This is something we have achieved successfully.

This is achieved by applying international private equity valuation standards and understanding that every investment is unique.

As a result, we apply multiple valuation strategies simultaneously, across different sectors, including discounted cash flow (DCF), multiples, return on equity (ROE) versus price to book value (P/BV), net asset value (NAV) and fair value.

Innovation meets pioneering

Everest remains a business focused on our clients.

However, clients are not only investors, and delivering value, service, and innovation across all spheres of financial service is our ultimate goal.

Achieving this goal enables clients to be part of a wealth ecosystem that not only aims to grow their wealth but also to both promote and protect it.

Everest is excited about what the coming years will bring and is embarking on a new world of solutions for our clients, financial advisors, and their clients.

Everest Wealth model portfolios

A first of its kind, these portfolios blend traditional investment and private equity with precision, allowing seamless integration.

We recognise the impact of combining different risk and return profiles to optimise client wealth creation.

This approach gives financial advisors the ability to tailor solutions to cater for both income as well as growth, while simultaneously managing clients’ access to capital and enabling the compounding of income or growth through higher dividend yielding portfolios.

Everest Wealth hedge fund portfolio

We understand that, due to the increased ‘true’ inflation, many clients require an aggressive, high-risk high-reward alternative for smaller portions of their portfolio.

Having managed a hedge fund strategy internally for the last 24 months, we are excited to offer this opportunity to select investors in the near future, having achieved:

• Annualised returns of above 65% p.a.
• Maximum drawdown of 8.67%
• Standard deviation of 10,43%

*The above figures are as from January 2025

Everest Wealth voluntary annuity equivalents

Compared to traditional five-year investment solutions, which offer clients guaranteed capital within a choice between income or growth, we ask: Why must there be a choice?

A solution that blends capital guarantees with both income and capital returns is an ideal allocation for investors seeking the best of both worlds.

Everest Invest LISP platform

Empowering financial advisors to build more tailored investment solutions cost-effectively.

This platform enables the seamless blending of traditional investments and private equity, all on one platform.

Everest Wealth credit providers

Everest Wealth is now a registered and approved credit provider, NCRCP21504.

We will be focused on providing retail clients with a unique offering that integrates their financial portfolio and overall financial well-being with access to business, transactional and asset-based finance.

Everest Wealth private credit portfolio

Private credit is an emerging alternative asset class.

Compared to private equity, it offers a different set of risks and liquidity characteristics.

While Everest has always prioritised tax efficiency through high- yielding private equity, we now also aim to provide an interest-bearing alternative, offering the potential for higher short-term returns – ideal as a smaller allocation for clients within a diversified portfolio.

Everest Wealth payments and rewards

The first extension of wealth management recognises that a comprehensive financial services ecosystem should not only grow and protect wealth but reward clients for building it.

We bridge the gap between private banking and investing, allowing clients to enhance their overall financial portfolio through their combined banking and financial portfolio experience.

Everest Wealth stock exchange listings

Everest Wealth recognises that to best serve all our clients, we must be accessible on a broader platform.

With two private debt listings currently underway, we look forward to enhancing accessibility, transparency, and the adoption of our distinctive investment portfolios.

Private equity value exits

We are excited to announce that, from some of our private equity assets, we are now shifting the focus towards unlocking capital value within these investments.

By considering multiple exist strategies – including current private market offers, public listings, and potential buyouts – we look to the future with renewed optimism.

Value added services

Rooted in a deep understanding that clients often overlook the importance of true wealth protection and longevity, we support and guide the transition from wealth creation to legacy fulfilment.

This is achieved through our dedicated team and personalised approach under Everest Fiduciary Services.

We also operate an established short-term insurance advisory business, Everest Protect, where we focus on delivering comparative, competitive, and sound short-term insurance solutions.

Currently, we are in negotiations with a prominent car brand to move into our own short-term insurance products, offering clients better value and broader coverage.

Everest advisory services

Since our inception, we have emphasised the importance of sound and professional financial advice to complement every investment opportunity.

Having become a trusted brand supported by financial advisors nationwide, we are now expanding our value proposition to external financial advisors and clients.

This includes offering financial advice and products focused on specialised alternative investments both locally and internationally.

With the opening of our Cape Town office, this expansion marks a key step in our commitment to ensuring that all clients and external financial institutions have access to Everest’s services across every province and region.

Over the next 24 months, we are targeting the growth of our team to 200 internal specialists and the establishment of 20 offices nationwide.

Our expansion plans also include exploring office openings in Mauritius, with a focus on offshore trusts, life insurance, tax planning, company formation, and the registration of a USD-denominated Private Debt Collective Investment Scheme (CIS) in Mauritius.

Everest Wealth remains committed to deeper engagement, continuous innovation, and transparent communication.

We are excited to continue pioneering new opportunities and remain optimistic about the journey ahead with all our clients, investors and financial advisors.

• Click here to learn more about Everest Wealth.

This article is provided for informational purposes only and does not constitute an offer or solicitation. Any figures or results referenced are historical and should not be interpreted as guarantees or indicators of future performance. Readers are encouraged to seek independent advice before making any financial or investment decisions.