Our opinion on the current state of ETHOSCAP(EPE)Ethos Capital Partners (EPE) is a private equity fund that focuses on long-term capital appreciation by investing in unlisted companies, primarily in South Africa and across Africa. Incorporated in Mauritius, EPE's investment strategy targets growth sectors, with holdings in companies such as Tymebank, Ster Kinekor, and Brait. Like many investment holding companies, Ethos trades at a discount to its net asset value (NAV).
EPE has diversified its portfolio to minimize risk, avoiding excessive concentration in any single investment. The company does not distribute dividends; therefore, investors rely on capital gains for returns.
In its latest update for the three months ending 30th September 2024, Ethos reported a 5.6% increase in NAV to 695 cents per share. The growth was primarily driven by unrealized revaluation gains in Optasia, which saw a significant value increase due to a performance improvement highlighted in the company's annual report.
The stock is fairly liquid, with an average daily trading volume of over R181,000. After hitting a low of 370 cents on 25th March 2020, EPE shares have shown a recovery as its investments rebounded post-COVID-19 and amid recent global economic pressures like the Ukraine crisis.
From our perspective, Ethos Capital Partners could be a solid investment at its current levels, especially considering it is still trading below its NAV. However, the potential for returns will depend on the broader trends in global markets and the performance of its key investments.
