The office.
The office manages the capital of the van Wyk family. It does not manage money for anyone else and does not sell advice.
What the office is for.
The office exists to hold the family’s capital across a longer horizon than any single person’s involvement in it.
That means it is run for continuity rather than for a result in any particular year. Capital is preserved first and compounded second. Positions are taken in the expectation of holding them, and the office would rather own less of something it understands completely than more of something it does not.
The family built what the office manages. It was not inherited, and the office is run by people who have seen what it took.
How the office thinks about capital.
A few things hold across everything the office does.
- i
It does not use borrowing to manufacture a return. Leverage is used where an asset carries it naturally and at a level the office could service through a bad year.
- ii
It accepts illiquidity where it is paid for it, and not otherwise. A position that cannot be sold must earn more than one that can.
- iii
It concentrates. The office would rather hold a small number of positions it has examined properly than a large number it has merely selected.
- iv
It is willing to hold cash and to do nothing for long periods. There is no allocation to fill and no timetable to fill it against.
What the office holds.
The portfolio is held across public markets, credit, private holdings and real assets. Most of it is managed in the ordinary way, through institutions and managers selected for the purpose and reviewed against what they cost.
A part of it is invested directly, in transactions the office finds and leads itself.
And a part of it is held as operating companies the office owns outright.
What the office will look at.
The office has no mandate and is not confined to an asset class, a sector or a structure. It has looked at private credit, operating businesses, real assets and situations that do not fit any of those descriptions, and it expects to go on doing so.
What is fixed is the test. A transaction has to be one the office can examine to the bottom, on terms it can negotiate rather than accept, with a downside it can describe in advance, at a size it can commit to without needing the transaction to happen.
Most do not pass. The office declines more than it takes, and records why, because a view that turned out to be wrong is worth more later than one that was never written down.
Its own capital, first.
The office commits its own capital to a transaction before the transaction is shown to anyone.
How the office is run.
Judgement sits with one principal. Analysis, legal work and administration are engaged transaction by transaction rather than carried as standing cost.
Every position is recorded with the reasoning that supported it, and so is every decision to decline. The office reads its own file before it commits to anything new.