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<p>PRIVATE EQUITY PLAYERS are often referred to as "the smart money" - the guys who make money executing transactions when there's much uncertainty in the market. While it sounds good in practice, few have been able to consistently deliver returns and then pass those returns on to shareholders. One of the exceptions is listed group Brait. </p>
<p>Brait has traditionally been one of the better dividend payers on the JSE and currently offers a yield of around 8%. It's priced on what appears to be an undemanding 12 times earnings multiple. That should be aided by a recent announcement by the group saying it was delisting from the London Stock Exchange and transferring its primary Luxembourg listing to the Euro MTF exchange, a move that should bring down its regulatory costs over coming years. </p>
<p>While costs are down, all eyes will now be on the moves Brait makes with its portfolio. A recent trading update from Verimark - in which Brait holds 7% - has shown a turnaround in operating performance and share price but that's been offset by a disastrous performance from mining supply and opencast mining contractor Buildmax (25% Brait). With that in mind investors can take some heart from Brait management's focus on meeting and beating quite high return on equity targets. </p>
<p>OPPORTUNITIES </p>
<p>* Transfer of listing away from the Luxembourg exchange and delisting from London Stock Exchange mean a lower cost base for the group. </p>
<p>* Attractive dividend yield. </p>
<p>RISKS </p>
<p>* Ability to unlock value in underlying investments at a reasonable pace. </p>
<p>* A R200m investment in Buildmax at R1,50/share in 2008 (now 50c) gives some indication of the investment cycle for private equity firms. </p>
<p><img src='http://www.fin24.com/downloads/Media/article_images/fweng_img/2007/sep/ee_bra290410.gif'> </p>
<p>Brait has traditionally been one of the better dividend payers on the JSE and currently offers a yield of around 8%. It's priced on what appears to be an undemanding 12 times earnings multiple. That should be aided by a recent announcement by the group saying it was delisting from the London Stock Exchange and transferring its primary Luxembourg listing to the Euro MTF exchange, a move that should bring down its regulatory costs over coming years. </p>
<p>While costs are down, all eyes will now be on the moves Brait makes with its portfolio. A recent trading update from Verimark - in which Brait holds 7% - has shown a turnaround in operating performance and share price but that's been offset by a disastrous performance from mining supply and opencast mining contractor Buildmax (25% Brait). With that in mind investors can take some heart from Brait management's focus on meeting and beating quite high return on equity targets. </p>
<p>OPPORTUNITIES </p>
<p>* Transfer of listing away from the Luxembourg exchange and delisting from London Stock Exchange mean a lower cost base for the group. </p>
<p>* Attractive dividend yield. </p>
<p>RISKS </p>
<p>* Ability to unlock value in underlying investments at a reasonable pace. </p>
<p>* A R200m investment in Buildmax at R1,50/share in 2008 (now 50c) gives some indication of the investment cycle for private equity firms. </p>
<p><img src='http://www.fin24.com/downloads/Media/article_images/fweng_img/2007/sep/ee_bra290410.gif'> </p>
