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MUTUALLY RELIANT

21 Oct General

ENTHUSIASM FOR SOUTH AFRICA and a voracious appetite for risk have been two of the key drivers behind the growth of JSE-listed investment group Hosken Consolidated Investments (HCI), which was founded and built up by Marcel Golding and John Copelyn. The pair are finalists in the Ernst & Young World Entrepreneur Awards 2010.

Golding and Copelyn were both involved in trade union work before starting HCI. Both were managing the respective investments in their organisation but in 1997 saw an opportunity to combine a 5% stake in Vodacom as well as a holding in Gauteng-based radio station Highveld Stereo. These shareholdings were reverse listed into HCI – at that stage, a cash shell on the JSE. Copelyn and Golding have expanded HCI’s portfolio into a significant conglomerate over the past 13 years, including holding company of gaming group Tsogo Sun, Vukani Gaming, free to air television channel e.tv, as well as smaller stakes in the energy, industrial and transport sectors.

Golding says HCI has grown largely on the back of circumstance. Its management team identified opportunities in new sectors of the market that were being liberalised, such as television and gaming. “We realised there’s was no free to air TV stations in SA,” says Golding. “We didn’t have the skills ourselves to run it but we surrounded ourselves with people who did.”

Golding says HCI prefers to have a controlling stake in the companies it owns so it can make major strategic decisions on where a particular business unit is heading. HCI owns 63% or more in each of the major business units it controls.

Another major factor that’s characterised the management style of Golding and Copelyn is their unwavering optimism in SA’s economy. “We see opportunity where other people don’t,” says Golding. “If other entrepreneurs want to exit because they believe the environment is risky, we want to enter that space.”

Copelyn says: “HCI has grown in value almost entirely on debt. We’ve acquired opportunities and paid down the debt and then started new debt.” He adds the company has preferred debt over issuing more equity and diluting the shareholding of the SACTWU Investment Group – its most significant shareholder.

Copelyn says HCI has evolved to the point where it can rely on its core shareholdings – gaming and media – to be sufficiently cash-generative to fund any future growth plans. Future avenues for growth have been identified in resources and property.

Golding concentrates most of his energy on its media holdings, which are concentrated in Gauteng, while Copelyn takes care of “everything else” from Cape Town. They say they’re completely reliant on the other person’s judgment after working together for more than 15 years. “If Johnny and I are in a new situation we won’t both rush to the fence,” says Golding. “One of us will remain cautious while the other person gets excited. These roles are often reversed.”

Source: Fin24 – Svetlana Doneva