Leading private equity firm, Stimulus this week announced that it has disinvested from the popular Windhoek restaurant, Joe's Beerhouse for strategic reasons.
The business was sold to the Rechter family as a going concern but Stimulus will retain 100% ownership of the property in Eros. The private equity firm,with N$250 million funds under management, said it decided to exit the popular restaurant primarily due to "portfolio re-organisation."
Prior to the sale, Stimulus had an 82.5% stake in the joint venture project while Habo Gerdes held a 5.9% shareholding with Anette Gross owning the remaining shares. The Rechter family, owners of the equally famous Gourment Restaurant, will now assume control of the restaurant after securing an 87.5% stake through a deal that will see them pay for equity for a period of three years. Manfred Enus, a member of the existing management team, will also have a 12.5% stake funded by Stimulus through a BEE initiative.
The sale is effective 1 June and remains subject to approval by the Competition Commission.
Announcing the decision on Monday, MD Monica Kalondo said that going forward, Joe's Beerhouse and its patrons will be best served as an owner managed entity. She denied suggestions that the sale was motivated by losses in the entity as a result of shrinkage.
She said: "As a private equity company, the consistent positive returns from Joe's Beerhouse year-on-year justified our investment, and to date, served us well from an investment return perspective. The continued involvement of Joe and Anette Gross (founders of the restaurant) throughout our investment was a key factor in our investment decision.
"We are, however, of the view that, going forward, Joe's Beerhouse and its patrons will best be served as an owner managed entity, given the high operational demands and daily attention to detail required in this type of operation."
Stimulus, the first private equity company in the country, was formed seven years ago and currently has over N$250 million funds under management of which N$90 million is in cash. The company has shareholding in various entities including Cymot, Plastic Packaging, Nashua and Walvis Bay Stevedoring.
While upbeat about the performance of the companies in which the equity firm is invested in, Kalondo, however bemoaned the lack of capacity in the country especially in green field investments.
She said: "It's difficult. We don't invest in the start up but in the person. The challenge is matching the right idea with the right person. We really have to be careful on who we select because it's after all pension money."
Kalondo said Stimulus was formed to provide a vehicle in which Namibian money, that was otherwise being channelled to South Africa, remain in the country and develop the Namibian economy.
"I think we have been successful in that regard. From the type of investments that we have made, the returns are indicating to us that we have made right investments; we have not lost any money.
"The measure of success on any private equity company is maintaining positive returns. In private equity portfolios, it is normal for one or two investments to be bankrupt and have others that are doing well, but we have not lost any money yet," she said.
Biggest funders of the equity firm are Allan Grey, Sanlam Investment Management, Namibia Asset Management and others.