from dusty streets to M&A superstar
Leadership’s Ralph Staniforth sat down with Kogae Rainbow Investment Holdings CEO Thabile Wonci to find out more about his rise to the top, where the firm is heading, and the importance of making the right investments
Kogae Rainbow Investment Holdings is a principal investment management firm which invests and acquires equity positions in companies that deliver sustainable financial performance with promising potential for future growth.
CEO Thabile Wonci explains that the firm looks to invest in well-run companies with stable management teams. “We are drawn to companies that are macro focused with scalable products and that are uniquely positioned and specialised. Needless to say, we are an active participant in the daily operations of all our investee companies and our investment outlook is long-term. We invest for future growth with the intention of building the balance sheet.”
The Johannesburg-based firm currently has investments in both the listed and unlisted space with an asset portfolio that has seen a compounded annual growth rate (CARG) of 22.89% over the last five years.
Wonci, who has been CEO since 2018, has nearly two decades of experience in investment banking, life assurance, property investments and fast-moving consumer goods (FMCG). His in-depth experience in investment banking and financial services saw him specialising primarily in mergers and acquisitions, corporate finance, business strategy and corporate restructurings.
Leadership sat down with Wonci to find out more about him and his motivations as well as unpacking what the future holds for Kogae Rainbow Investment Holdings.
A humble journey to success
Born in a small village called Woodlands Location in Peddie, Eastern Cape to teenage parents, Wonci was raised by his maternal grandmother. He attributes much of his current success to his grandmother’s early lessons around being open-minded, hard-working, determined and always trying his best.
After completing his primary schooling in Peddie, Wonci moved to Gqeberha (then known as Port Elizabeth) where he lived with his mother’s younger sister. Moving from a small rural village to a city township was an eye-opener for the young Wonci, exposing him to a plethora of new experiences. It was also an opportunity to attend what he calls a ”proper school” to get a ”proper education”. It’s also when his life-long love affair with books and learning truly blossomed.
”I was always top of my class and I really enjoyed maths, accounting and business economics,” he reveals. “Books became my compass. I was a regular at my local library all the way through high school and varsity. I enjoyed studying and I recognised that education was the only route out of the environment that I was in. I’ve always been goal-oriented. I suppose growing up in the environment that I did, there was never any other choice except to work towards a better future and a better tomorrow.”
During his matric year, South Africa’s first black maths professor, Professor Thamsanqa Kambule from the University of the Witwatersrand, visited his school. It was a visit that was to have a profound impact on Wonci.
”During his visit, Professor Kambule spoke extensively about his love for maths and what maths had done for him in terms of opening up opportunities–and what maths could do for us. It left such an indelible mark on my life. He helped me to realise that whatever dreams you have, they are possible. As a result, I applied to study a BCom at the Nelson Mandela University and was accepted.”
In addition to a BCom, Wonci also has a PGDip Management Accounting from the University of South Africa, and an MBA and PDBA, the latter both from GIBS Business School. “I recognised early on that education was a way out of villages and the townships,” he says.
The lessons we learn as we grow
Wonci is a firm believer that neither circumstance nor age define you as a person. ”Age and circumstance should never be barriers for one’s ambitions. When you have courage and a burning desire to achieve, everything becomes possible. It’s important to find space for inspiration. If that space is your faith, hold onto that. If that space is your parents or your grandparents, then hold onto that,” he insists.
He’s also a firm believer that your actions of today should have a positive impact on the next generation.
”To live a fulfilled and meaningful life, you need to be able to look beyond yourself. What kind of future do you want to leave for future generations? What are you depositing into the future of the country, for the future of your children? These are important issues to consider, particularly for those children born in South Africa’s villages and townships who need to have the right foundations laid from the outset,” he says.
Conceding that there will be challenges and failures along the way, he says it’s important not to lose perspective and to use goals and ambitions as a compass to help you to look beyond what’s happening in the here and now.
“I’m able to look beyond short-term challenges, knowing that I’m building something for a better future,” he says.
Any gains, he adds, must be celebrated given that they provide perspective on your journey.
A long-term investment partner
Kogae Rainbow Investment Holdings is far from your average investment management firm. A combination of the right skills, experience and a multi-faceted approach have combined to ensure success for the business.
”Our biggest differentiators are the skills we bring to the table,” reveals Wonci. “We are a multi-faceted firm with teams that have significant working experience within finance and investments after working in investment banking, private equity, manufacturing and retail and advisory services. We bring these skills to all our investment opportunities with our expertise assisting in profit and loss management, balance sheet management, organisational restructuring, balance sheet restructuring, and even evaluating capital structure decisions.”
Understanding an entity’s capital structure, he explains, helps the firm to understand where the bottlenecks lie so that they can design a business plan that addresses all the relevant issues simultaneously.
The firm prides itself in ‘showing up’. “We understand that deadlines are deadlines. We are very thorough and obsessed with delivering quality work. In addition, we are solutions driven and that’s informed by the openness and transparent leadership style that I espouse,” he says, adding that transparency is a cornerstone of the business.
When considering a potential investment, Wonci and his team look very carefully at the incumbent management team. “When you dig a little deeper into their management style and business philosophy you are able to ascertain whether this will be a worthwhile investment or not. You have to remember that you’re investing in a largely unknown entity so the more insight you have into the management team the better.”
The firm prioritises doing business with ethical management teams that put good governance front and centre. “We tend to walk away from investments where we see traits of dishonesty and a lack of integrity as these are not values we share as a business,” he reveals.
The investment opportunity also has to fit in with the remit of the firm. Wonci explains that the firm needs to understand the company or industry before deciding to invest in it. “I need to be able to talk confidently about the business, understanding what it does, who its customers and suppliers are, where it generates cash, how its cash gets managed, the key industry drivers, where the opportunities lie and how to harness those opportunities, the risks it faces and how to mitigate those risks. These are just some of the questions we should be able to answer before deciding to invest in a business.
The life of a CEO
The position of CEO comes with significant responsibility. If not managed correctly, that responsibility can easily turn into stress. Wonci says he has a strong support system in the form of his family who also keep him grounded.
“I’m married to a very supportive wife and the father of two beautiful daughters. My family’s support has been a game-changer; they’re my compass and clearly define my focus.”
Being a father, he reveals, has taught him numerous life lessons. “As businesspeople we sometimes forget to show empathy, patience and consistency. Fatherhood has helped me remember those lessons. There have also been valuable lessons I’ve learned through my marriage about being emotionally present and not to ignore nuances.”
His faith has also played a significant role in keeping him grounded and humble. “I’m a born again Christian and I derive a great deal of inspiration from the word of God. The principles that drive me in my business life are all biblical.”
A certified director with the Institute of Directors South Africa (IoDSA), Wonci shares the IoDSA’s commitment to the principles of good governance and ethical leadership.
”South Africa is littered with so many ills currently: social ills, business ills and economic ills. Things are broken in our communities. Despite all these challenges I believe we all have a moral obligation to look for – and hang onto – the positives. That needs to be an even bigger priority if you are in a leadership position.”
In the current environment, a strong mental capacity is an imperative, he insists. “You need to have the mental capacity and resilience to withstand the challenges that will undoubtedly be thrown at you.”
A keen cyclist and runner, and an avid reader, he says these activities help him to destress and recharge. He particularly enjoys reading business books, biographies, books about China and other economies that are changing the world order.
Dealing with the challenges of today
Being a black businessperson and building an investment management firm with no generational wealth at his disposal has been a significant challenge for Wonci. Throw in the fact that access to capital has been difficult, and the success which Wonci has managed to achieve is nothing short of remarkable.
That success is in large part down to his steely determination, boundless energy and can-do attitude. It’s an approach which has rubbed off on the investment activities at Kogae Rainbow Investment Holdings.
”Our growth in the last few years has been exceptional,” says Wonci. “We’ve broken boundaries and redefined what a black-owned investment management company can achieve.”
Although the firm still sees good opportunities, these need to be matched by available capital, and that remains one of the biggest challenges it faces. ”It’s difficult to build a balance sheet in South Africa when you don’t come from wealth,” concedes Wonci. “Growth is that much harder to achieve when you don’t have the backing of a large corporate behind you. The fact that we have managed to build a strong book in spite of these challenges is testament to the skilled and experienced team we have in place and is something I’m particularly proud of.”
Attracting the right talent that positions the company for growth is critically important to the firm’s future success.
“Ultimately, we’re looking to build a multi-billion rand entity. This requires talent in investment banking and private equity. We are cognisant that these skills come at a premium and that we are competing for these same skills with other players in our sector. I continue to have faith that we offer a compelling proposition to those looking to grow both their careers and to grow at a personal level,” he says.
One of the reasons the business has been able to be quite aggressive in its equity acquisitions and investment activities is due to its ability to strengthen and bolster the investment entity with the right skills at the right level.
“Of course, capital remains a challenge and the speed at which we access that capital also remains a challenge,” says Wonci. “We are cognisant, however, that opportunities can disappear very quickly if you don’t move with speed.”
An empowering leader
The success of Kogae Rainbow to date is in no small part due to Wonci’s leadership style. His is an inclusive leadership style which allows each team member to have their voice heard and which encourages a culture of constant learning and the sharing of knowledge.
”My leadership style is based on mutual co-operation and respect,” he explains. “We all come to the table as equals, regardless of our respective positions. What I have realised over the years is that this approach empowers everyone at the table not to hold back and challenges them to present their best selves. It’s an approach which provides the space for new ideas and gives everyone the right to disagree or share a different point of view. In the process, we all have an opportunity to learn from each other.”
Having sat on a number of boards in non-executive positions during the course of his career, ethics, integrity and accountability are all values Wonci feels particularly strongly about.
”As a leader, your conduct and ethics need to be beyond reproach. Conduct includes everything from how you show up and how you engage with prospective sellers to how you engage on any given opportunities. A leader’s conduct needs to be informed by an honest approach, underpinned by integrity and accountability. I like to think that integrity combined with a strong focus on ethics and accountability are hallmarks of my leadership style,” he says.
A three-pronged approach to a bright future
As to what the future holds, Wonci says he hopes to drive a notion that he calls “values-based leadership”. Essentially, this is about the business sector being responsible for providing ethical leaders intent on building South Africa for a more sustainable future.
On a personal level he plans to continue to be a present father for his daughters, a committed and loving husband to his wife and to continue to work on strengthening his spiritual and emotional maturity. “We live in a society where hope is in short-supply currently. I want to be one of those people who maintains their sense of hope and optimism and is a beacon of principled and ethical leadership.”
From a business perspective, he believes that Kogae Rainbow is poised to bring meaningful value to all its investment partners. “Financial prosperity will provide its own virtuous circle, allowing the firm to attract and retain the best talent while giving us sufficient dry power to deploy into good investment opportunities,” he concludes.
Ralph Staniforth is the Production Editor of Leadership
Kogae Rainbow Investment Holdings' investment mandate
Sustainable Financial Performance: Companies that can demonstrate sustainable financial results and pro-forma expectations as evidenced by positive earnings before interest, taxes, depreciation, and amortisation (EBITDA).
Uniquely Positioned and Specialised: Demonstrated niche markets with proven technology and business model.
Turnover and EBITDA: Companies with a minimum turnover of R100 million with sustainable EBITDA of at least R25 million. EBITDA sweet spot of R50 million to R70 million.
Macro Focused and Scalable: Invest across different industries and in businesses that have scope for growth beyond South African borders.
Stable Management Teams: Invest alongside experienced, knowledgeable, and committed management teams.
Investments in Mandated Sectors: Invest in key sectors that are driving economic growth and development.
Kogae Rainbow Investment Holdings' investments
Motor Control and Automation: Specialist in low and medium voltage motor control centres, power distribution boards, and variable speed drive enclosures.
Refrigeration Manufacturing: Manufacturer of insulated shelters for the telecommunications industry.
Last Mile Delivery Specialist: Specialist distributor that provides customised distribution solutions for home deliveries and campaign driven logistics.
Supplier Of Metal Springs: A major supplier of metal pressings, springs, wire forms, and strip springs to various industries, including automotive, electrical, construction, agriculture, and textile.
Solar PV Plant: Operator of a medium scale (50MW) solar PV power project originally awarded under Namibia's Interim Refit Renewable Energy Production Project.
Plastic Manufacturing: Flexible film manufacturer that services the packaging, construction, and agricultural sectors, which holds a key competitive advantage through its ability to blend various virgin and recycled polymers.