Our Investments

Investment Strategy



Conduit Capital takes responsibility for guiding subsidiary business strategies and allocating capital across the Group as efficiently as possible. We operate on a decentralised basis and invest long-term and sustainable growth, primarily in the insurance industry.

Our investment strategy is aimed at creating more than a rand of value for every rand invested by Conduit.

1   We spend time identifying, researching and evaluating identified opportunities. Conduit will buy or invest in companies when the right opportunity presents itself and is logical from an opportunity cost point of view. We are conservative, yet opportunistic capital allocators, always considering the potential downside of an investment before evaluating its upside. We seek companies with durable competitive advantages and managed by motivated, honest and ambitious people.
2   Investable capital, by order of preference, will be used first to support internal growth in existing insurance operations. Should sufficiently attractive opportunities not be identified, we will seek acquisitions in the general realm of insurance or non-insurance businesses.
3   If we cannot find a reasonable opportunity, we will look to acquire publicly traded securities for the dual purposes of supporting our insurance operations and earning superior long-term returns on capital.
4   Finally, we will consider repurchasing Conduit Capital shares when we decide this action will create better returns than any of the above choices.

Conduit is a long-term shareholder in a select group of listed companies. Although we focus on insurance businesses, we concurrently invest in non-insurance businesses to bolster our capital base and, through earnings diversification, allows our insurance operations to focus on profitable growth.

Our investment objective is to identify, understand and invest in companies meeting two broad criteria:

1   The company must be available at a price that represents a significant discount to our conservative estimate of fair market value.
2   There must be a confluence of business factors, centred primarily on the competitive advantage of the business model, which allows the company to increase its underlying intrinsic value at a high rate over time.

In deciding on companies in which to invest, we spend significant time understanding the business, researching its competitive advantage and getting to know management. We primarily seek out four key attributes:

1   The company must have a competent and energised management team.
2   The business must demonstrate a robust competitive advantage that will enable it to maintain and grow its economic position over time.
3   The company must have a clear path, over the next 10 or more years, to produce and compound long-term growth in intrinsic value.
4   While many companies may tick the three preceding boxes, even a great business can be a bad investment at the wrong price. We therefore have the patience and discipline to wait for the right company at the right price.

Recognising that business value and market price can diverge for long periods of time, we take a disciplined and patient approach to realising value.

At this stage of Conduit Capital’s evolution, we are not necessarily concerned that Conduit’s net income after tax may be lumpy. Stock prices are inherently volatile and market behaviour is not always rational. Growth in net asset value per share is a better proxy for the performance of Conduit’s underlying business value.

The Conduit team take responsibility for the Group's strategic and operational functions.

The team comprises:

  • Leo Chou, the Group CEO, whose responsibilities include the management of existing investments as well as all new investments; and
  • Lourens Louw, FD, who is responsible for the Group's finance and treasury function.

The aforementioned team is directly accountable to the Board and ultimately to our shareholders. Conduit Capital operates from a head office in Cape Town.

The Board and Executive Directors are supported by a lean staffing complement mandated to:

  • support innovation and drive growth in our underlying businesses; and
  • guide and maintain skills development.

Conduit Capital functions through a decentralised structure, with each subsidiary managing its own infrastructure, resources and operations independently. Where in-house expertise does not exist to fulfil a particular specialised function, it is outsourced.

These businesses are separate legal entities to which we provide strategic, financial and or managerial support, as required. This philosophy is applied to all investments in the Group, irrespective of the level of influence that we could exercise. Our investments and partnerships are managed through the following interactions, including, but not necessarily limited to:

  • Regular formal or informal engagements with the Executives from our various subsidiaries
  • Monthly financial reporting to Conduit Capital
  • Where appropriate, appointments to non-executive Board positions

The value and performance of the underlying investments – rather than activities at holding company level – will essentially determine the value Conduit Capital creates for our shareholders.

Our key value creation goals and drivers include:

  • Return on Capital Employed
  • Growth in Intrinsic Value (measured by an increase in Net Asset Value per share)
  • Investment returns, with specific reference to investments in equities
  • The combined ratio achieved by our Insurance interests
  • Growth in investable assets in our Insurance interests


Strategic support and capital allocation to grow insurance and investments
Invest in and support insurance opportunities
Generate sustainable premium growth and underwriting profits
Utilise underwriting profits for capital investments into non-insurance opportunities
Non-insurance opportunities build additional value
Grow the capital base



Guiding strategy
Allocating capital
Mitigating risk
Ethical leadership and corporate governance
Group corporate services, finance and treasury