PRESENTATION TO PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY Khanya B Motshabi

1. PRESENTATION TO PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY Khanya B Motshabi Chief Executive Officer 12 March 2003

2. PRESENTATIONOUTLINE • Background • Vision • Current Status • Strategy • Structure • Product Roll Out • Corporate Targets: 2003/4 • Divisional Outputs • Impediments to delivery • Gearing for delivery

3. BACKGROUND HISTORY • NEF Act 105 of 1998 • CEO appointed April 2001 • SOCE equity designated • CAPITALISATION • Portfolio estimated at R2,1bn • Assets not transferred • Presented capitalisation proposals • NEF VENTURES • NEF and IDC partnership • Based on R200m commitment

4. VISION Vision “Leading provider of innovative finance and investment solutions for an inclusive economy.”

5. CURRENT STATUS INFRASTRUCTURE Physical and IT infrastructure • POLICIES AND CONTROLS • Organisation polices, procedures and controls • Disciplined and rigorous investment process

6. STRATEGY • Guided by government policy • Transformation sensitive sectors • Government initiatives • BEE procurement • Routine transactions General Specific • Market making • Risk reduction • Entrepreneurship • VC, PE and ME • Big and small

7. STRUCTURE Corporate Centre Private Equity Venture Capital Investment Services

8. PRODUCT ROLL OUT VENTURE CAPITAL Finance economic empowerment and black business development. Progress and Prospects

9. PRODUCT ROLLOUT PRIVATE EQUITY Finance economic empowerment and black business development. Progress and Prospects

10. PRODUCT ROLL OUT INVESTMENT SERVICES Promote savings and investments by offering mass empowerment Schemes backed by targeted programmes of investor education. Progress and Prospects

11. CORPORATE TARGETS: 2003/4

12. VENTURE CAPITAL OUTPUTS • First deal of R5m approved. • Four deals estimated at R25m in pipeline • Target : July 2003 • Targeting additional ten deals by year end. • Based on R170m portion of R200m. • Leverage the R30m fund to raise additional R30m. • Estimated 10 deals March 2004. • Additional R250m for Incubator Fund.

13. PRIVATE EQUITY OUTPUTS • Based on R1,5 billion fund. • At least one deal per month estimated at R20m. • Targeting 9 deals for 2003/4. • Total investment of R180m in year 1.

14. INVESTMENT SERVICES OUTPUTS • R200m retail offering per annum over a five year period: First retail offering of R100m targeted for 2004. Estimated 300 000 subscribers per offering. • Focus on fewer, but large size offerings initially: Target LSM 1-6. Long-term investment & partial capital guarantee. • Unitised portfolio investment ready 2004/2005. • Warehousing of equity for future retail offers.

15. IMPEDIMENTS • Delivery has been slower than anticipated. • Integration of NEF Ventures into business. • Staff turnover in NEF Ventures. • Staffing capacity resulted in slow deal approval. • PE CIO required to support NEF Ventures. • Quality of received applications not optimal. • Slow capitalisation resulting in one operating division.

16. GEARING FOR DELIVERY • Building capacity to speed up deal through-put. • Redesigned processes and systems to fast track deal approval. • Reviewing mandate and redesigning products: Address changing market needs. • Planning for redeployment of larger capital pool. • Valuable experiences from first fund to launch next phase. • Partnering other DFIs to raise capital and access market.

17. Key Management • Chief Executive Officer : Khanya B Motshabi • Chief Operations Officer : Motlalekhomo Mokhobo • Acting Fund Manager : NEF Ventures : Dineo Skwambane • Chief Investment Officer : Private Equity : Alun Frost • Chief Investment Officer : Asset Management : Forthcoming • General Manager : Marketing: Themba Langalibalele • General Manager : Retail : Vijay Ramluckan