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68 FINANCE | African Rainbow Capital
“Typically, we invest in stable businesses with an excellent management team and good prospects, and we want to buy that business at a discount,” says van der Merwe.
As a result of ARC’s attractiveness, as an investment  rm with BEE credentials and readily available capital, the company is able to claim discounted prices upon entry into a business, usually around the 20% mark.
However, buying into a business represents a long-term commitment for ARC.
“We invest for the long term and don’t see a lock-in (to ensure BEE credentials) of anything up to  ve years as a problem.”
During this time, ARC will place a huge emphasis on driving the management team
forward, while guaranteeing to make the  rm either more defensive or competitive after it absorbs ARC’s empowerment credentials.
Consequently, over its short period of existence, ARC has identi ed (and been identi ed by) a vast array of companies across multiple sectors in South Africa. One such focus has emerged in the South African real estate sector, which seems particularly fertile for investment.
Real estate
The myriad property investment prospects available to ARC has opened up an interesting joint venture opportunity, which saw the company team up with Jonathan Beare, one of the most successful real estate investors in South Africa, and his team from Signature Investment Holdings.

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