When it comes to investor communications and engagement with the investment community, many South African leadership teams err on the side of caution. In that context, it is refreshing to see the engagement strategy being employed by Fabricio Bloisi.
Bloisi is joint CEO of both Naspers and Prosus and is well-respected member by the asset management and analyst community – particularly those covering telecom and technology stocks.
A unique set of shoes to fill
Before unpacking where Bloisi excels, it is worth taking a step back and understanding some of the dynamics around the leadership teams at Naspers and Prosus.
Buoyed by its early moves into China and its investment into Tencent, Naspers has become the most valuable business on the JSE and a key contributor to pension fund and retirement outcomes for many South Africans.
Much of this success was achieved under the leadership of Koos Bekker until he handed the mantle of CEO to Bob van Dijk in April 2014. Van Dijk would hold the position of CEO of Naspers and Prosus until September 2023.
When Van Dijk stepped down there were many question marks, perhaps best captured in this column from Tim Cohen for the Daily Maverick:
“Van Dijk may have had all kinds of other skills, but the brutal fact is that he never managed to convince shareholders that there was value in Naspers outside its investment in Tencent. Overall, it’s hard to see any value in the share that wasn’t the result of Tencent’s grand rise, and latterly, its decline.”
Van Dijk was briefly replaced by Chief Investment Officer Ervin Tu, before Bloisi was promoted internally and appointed CEO in May 2024.
This was a move which was met with some optimism as captured in this note from Jonathan Kennedy-Good – analyst at Prescient – who noted:
“Bloisi is highly regarded as a smart operator and has grown iFood into one of the most innovative food delivery businesses in the world. If Bloisi can balance unlocking value through driving profitability in the ecommerce portfolio and managing capital deployment to enhance returns, while further narrowing the discount Prosus and Naspers trade to their net asset value, investors may reap strong investment returns.”
What differentiates Bloisi?
Executives across the Naspers and Prosus stables have long been well compensated, but over time they were coming under scrutiny. Many were being rewarded for a Naspers share price which was largely being driven by the Tencent gains but due to a complex shareholding structure was effectively trading at a discount to net assets.
In some ways, the market felt that the business had lost its entrepreneurial spirit.
Bloisi has changed this materially.
Firstly, he lives and breathes technology and innovation – this is well captured across his social media channels including Instagram where he welcomes interaction with stakeholders:
Secondly, Bloisi has adopted a far more engaging approach to shareholders as evidenced by his latest Prosus newsletter which accompanied the financial year end in April.
Where predecessors may have preferred to wait until audited financials were completed, Bloisi wanted to communicate his intent to provide more regular shareholder updates beyond the mandated reporting periods.
On top of that his communication style is engaging, he talks about the shifting company culture, some of the events where Naspers / Prosus businesses were represented and then shares some white papers or case studies to help explain what the business is trying to achieve.
As an investor, you feel that you are being made part of a story and that you are being educated around the strategy, how the team is tracking and some of the challenges and opportunities across new industries.
His engaging content was picked up across a variety of media platforms and many people shared his letter to shareholders.
Closing note: Executive compensation that shareholders can get behind
While there is no question that Bloisi is passionate about technology and the businesses he is building, we shouldn’t forget that he has been given a very unique incentive structure.
Described as a “Moonshot” award, Bloisi will receive a bonus of $100m if he meets the following 2 criteria simultaneously:
- The group’s aggregate market capitalisation is doubled or better within four years between 1 July 2024 and 30 June 2028. This value must be maintained for at least one year, thus to 30 June 2029.
- The group’s net value creation over the four-year term measured in US$ in terms of total shareholder returns compared to the TSR peer group beats the 50th percentile.
Shareholders – from institutional to the ordinary retail investor – will be watching this story with interest.