What was your vision when you started Pamodzi and did it differ from what you eventually achieved? In 1979 Solly Sithole and I founded Pamodzi Property Developers. In spite of the oppressive apartheid conditions of the era, we took on the odds head-on. When the times got tough, we adjusted our course slightly not losing sight of our destination. In 1996, emerging business opportunities inspired us to partner with other black professionals and entrepreneurs to incorporate Pamodzi Investment Holdings (PIH).
Since then, PIH has raised R16 billion in equity and debt which is invested in a strong portfolio of market leaders. During the early years, many PIH executives went without salaries for months. We remain passionate about creating social and economic benefits for everyone who is touched by our business. My colleagues continue to focus on our destination to develop our holding company into a R5 billion market capitalisation firm by 2009
What are some of the highlights of your success?
They say companies are as good as their last results. 2007 was the most successful year in the 11-year history of PIH in terms of raising capital and substantially increasing brand equity. Last year alone we raised the US$1,3 billion Pamodzi Resources Fund, which is Africa’s largest private equity fund. From an initial capital injection of R1,9 million in 1996, independent valuation issued last year placed our company’s equity value in billions of rands.
Also in 2007, our efforts were recognised with the Ernst & Young World Best Entrepreneur Award (South Africa); Black Management Forum’s Progressive Company of 2007; Financial Mail’s Mover & Shaker of 2007; and Top Entrepreneur for 2007 from the Association for Black Securities and Investment Professionals.
As the business grew, what challenges faced you as a leader and how did you overcome these?
My personal challenges were two-fold: raising capital locally and leading a team of diverse professionals and entrepreneurs. R12 billion of the R16 billion we have raised in equity and debt was sourced offshore. Such lack of support by local financial institutions hampered our growth. I am reminded of growing up in Orlando West where I was always at the mercy of the boys who owned marbles.
These boys dictated the rules of the game. At sunset, when their families called them to come indoors, naturally they would collect their marbles and run home. In most cases, the game ended abruptly when I was winning. Raising private equity funds enables Pamodzi to have its own marbles to play in the economy. On the other hand, leadership is a continuous learning cycle. Before you are a leader, success is all about growing yourself. When you become a leader, it is about growing others. To me, leadership is about beliefs, attitudes and behaviours. I invest my time and energy in upgrading my team, using every encounter as an opportunity to evaluate, coach and build self-confidence.
What are the most significant changes have you witnessed in the market and what future changes do you see on the horizon?
For black owned and controlled companies, it’s difficult to raise capital locally unless you are willing to be locked into 10- or 15-year “marriage” with a major company without harvesting a cent in dividends. When we closed the US$1,3 billion Pamodzi Resources Fund there was speculation as to how a “black” company cracked it.
Prior to closing the fund, local financial institutions asked us to share with them what we were smoking to think we could raise such a history-making private equity fund. Well, we continued smoking our thing, and eminent offshore investors joined the party. However, most people agreed that the reason was not mysterious at all. Pamodzi has one of the most hard-working teams in South Africa. And we are all bound together by a winning spirit so palpable you can feel it in the air.