Investing

South African businessman made R87 million with one decision

An East Rand-based businessman gave Vestact $800,000 (R8.6 million) to invest in 2014, which they grew to $5 million (R96 million) over the last ten years.

This businessman’s decision to give his money to a component investment manager means he made R87 million over the last decade.

Vestact is an employee-owned active investment manager headquartered in Rosebank, Johannesburg.

It offers investment management services to private clients and manages assets on behalf of its clients through segregated portfolios on the JSE and the New York Stock Exchange.

Paul Theron founded Vestact in 2002, and its model portfolio outperformed the JSE All Share Index and S&P 500.

In his annual letter, Theron provided details about their performance in 2024 and details about their expectations in 2025.

“2024 was another stellar year. The Vestact model portfolio rose by 40.9%, crushing the S&P 500 by a wide margin,” he said.

He highlighted that this is a real portfolio which pays advice fees and occasional brokerage charges and earns dividends.

Theron said this portfolio belongs to an East Rand-based businessman who sent them $800,000 in 2014. The account is now worth over $5 million.

“Vestact’s 10-year investment performance has a nice margin of safety over the broad index,” he said.

The portfolio is up 18.6% per year after all fees, on average, over the last decade. This is significantly higher than the S&P 500, which is only up 11.1% on average.

The portfolio is invested in major US stocks in the tech and healthcare sectors. “Over time, we expect our preferred stocks to do better than the S&P 500, with very little turnover,” he said.

Theron said that in 2024, some of their stocks, like Nvidia, did well, and others, like Nike, did not.

Vestact is optimistic about 2025. It believes that the US Federal Reserve has room to trim interest rates and that inflation will decrease.

“The Trump administration says it will cut taxes, remove regulation, and promote mergers and acquisitions,” he said.

“We are excited about the advances in AI and weight-loss drugs. The second half of the 2020s will be good, so we should all be fully invested.”

Vestact’s recommended shares

Last year, Vestact published a list of fifteen international and seven JSE-listed stocks it recommends.

This list includes many well-known companies, including Apple, Google, Naspers, and Discovery.

United States shares

  • Alphabet (Google) dominates online search, advertising and video-hosting.
  • Amazon sells everything online and has the leading web-hosting service.
  • Amgen makes biotech drugs for heart disease, cancer and arthritis.
  • Apple supplies iPhones, Watches, Macs and iPads, and services on the App Store.
  • CrowdStrike is an AI-powered cybersecurity company that fights hackers.
  • Eli Lilly is a research-driven pharma company selling a weight-loss drug called Zepbound.
  • Johnson & Johnson makes health products, medical devices and pharmaceuticals.
  • Meta Platforms owns top social media apps; Instagram, WhatsApp and Facebook.
  • Microsoft owns the MS Office applications, Windows software and Azure hosting.
  • Netflix creates content and owns a subscription-based streaming service.
  • Nike designs and retails running shoes and swoosh-branded sports equipment.
  • Nvidia makes leading chips for AI, cars, data centres and gaming computers.
  • Stryker makes hip and knee joints, surgical tools and hospital equipment.
  • Tesla makes top-selling electric vehicles, charging stations and batteries.
  • Visa runs a payment network that connects banks, merchants and cardholders.

JSE-listed shares

  • CSP 500 is a JSE-listed and Rand-denominated ETF that tracks the S&P 500 index.
  • Aspen manufactures sterile anaesthetic and thrombosis pharmaceutical products.
  • Bidcorp is a food services company with operations in Asia, Europe and the UK.
  • Discovery uses technology to provide healthcare, insurance and banking services.
  • Naspers is the South African holding company for Prosus (see below).
  • Prosus owns food delivery, classifieds and gaming businesses, plus 30% of Tencent.
  • Richemont owns luxury brands like Cartier, Montblanc and Van Cleef & Arpels.

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