||160.000 Euro Preference Shares
||2013 - 2018
||Jan Willem Fieren, Regional Investment Manager Southern Africa
NGOs that are largely dependent on funding from donors are vulnerable. To provide an alternative source of income, nineteen South African NGOs formed the Ditikeni Group. ICCO Investments invested 160,000 Euros.
With involvement of ICCO, nineteen South African non-profit organizations seeking financial sustainability formed The Ditikeni group in 1999. Ditikeni is an investment fund that was established to generate an alternative source of income for its shareholders. The primary aim of Ditikeni is to broaden its investment capital and increase the annual dividend paid to its shareholders, which can then be used for their core mission.
Investing in BEE
Ditikeni has a thirteen-year track record of investing and distributing the profits to the shareholders. It invests with capital from its founders (nineteen NGOs) and other investors in Black Economic Empowerment (BEE) companies in South Africa. Ditikeni now has a portfolio with a wide variety of companies, from large to small and in several sectors. Examples are: Avis, CareCross, MTN. These are all regular companies for profit who have earned BEE-ratings from the South African government.
Ditikeni applies ethical criteria to its investments and conducts annual social audits of all existing investments. Ditikeni is represented on the boards of eleven out of seventeen companies in the portfolio. Stakes range from 1% to 50%. In the companies where the stake is substantial, Ditikeni participates actively at the strategic level and influences the social and ethical agenda of these companies. Many of the portfolio companies have shown a rapid growth over the last decade, with the result that the impact Ditikeni has with its investees is substantial.
Ditikeni has made 23 investments in the past ten years and the current portfolio consists of seventeen companies. The founding NGOs of Ditikeni originally contributed R2.8 million (about 195K€) from their own resources to fund Ditikeni’s investment capital. This was all repaid in 2007. The aim to build up a portfolio that will generate structural income for the founding NGOs was successful. So far over R5 million (350K€) has been distributed to shareholders to date. A share in the Ditikeni fund worth R1 originally is now worth over R10 at tangible Net Asset Value. The internal rate of return for shareholders from 2000-2012 was 36% per annum.