Rational Perspective

In the late 1990s, Naspers’s then CEO Koos Bekker and his right hand man, the late Antonie Roux, applied what they termed a “mud on the wall” strategy. Based on the belief that their core print publishing business was dying, using largely borrowed money they took bets on many fledgling internet companies in emerging markets. Among them was a small Hong Kong business called Tencent which they bought half of for just over $30m. That has turned into the best private equity investment in history. Until last month, Naspers never sold a single Tencent share. When it did finally sell, for $9.8bn, a modest two percentage points of its ownership – dropping its stake in Tencent from 33% to 31% - the company realised an astonishing 326 times on its total investment. But such an amazing creation of value brings its own challenges. In its native South Africa, Naspers now has a weighting of over 20% of the Johannesburg Stock Exchange’s all share index, raising concerns the entire nation’s savings are too heavily dependen