When he talks, people listen; when he moves money, markets react and when he invests, many follow.  He is Christo Wiese, Africa’s third richest man after Aliko Dangote and Nicky Oppenheimer &amp; family, according to FORBES’ list of Africa’s 50 richest, and the creator of Africa’s largest retail store. He is ever busy as he adds to his $6.5 billion fortune, but his last investment raised a few eyebrows.
As we meet, Wiese is dressed in black pants and a black sweater; you may mistake him for an ordinary bloke on the street in Cape Town, South Africa. But, there is nothing ordinary about this man when it comes to business. His creation, Shoprite, earns revenue of $9.9 billion a year, at a time when retail is struggling. Steinhoff, the parent company of Wiese’s retail company PEP, brings in $11.8 billion. Combined, they net almost $2 billion in annual profits, operate more than 9,000 stores in 30 countries and employ over 200,000 people. He made his fortune from smart investments that earned him billions. So, why is he looking to venture into Africa’s glittering, but struggling, diamond industry?
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The family businesses, Cream Magenta 140 Proprietary Ltd. and Metcap 14 Proprietary Ltd., bought close to 50 million shares (23.54% each) in diamond company Trans Hex. This adds up to a dominant stake of just over 47%.
This isn’t entirely new territory for the risk taker. Wiese was in diamond mining in the late 1990s through an investment in Ocean Diamond Mining Holdings (ODM). He sold ODM to Namibian-based diamond miner Namco.
“I used to be in the diamond industry 40 years ago and the opportunity arose to acquire a controlling stake in Trans Hex which is one of the junior diamond mining companies and one I think has potential,” says Wiese.
The cold fact is South Africa’s once thriving diamond industry is suffering atrophy. It has no more than 200 diamond beneficiators remaining from a historical peak of about 4,500 and a decline in investment, according to Mining Weekly.
“Rough-diamond prices are too high for manufacturers, who cannot profitably polish goods at such levels. Polished-diamond prices have declined, in turn, reducing demand for diamonds from South African mines, as well as throughout the world,” it says, quoting World Federation of Diamond Bourses president Ernie Blom.
Trans Hex has not been immune. Their 2016 results suffered heavily from a sharp decline in rough diamond prices.
“The diamond market was severely impacted by excess stocks in the polishing industry and a resultant decline in demand for rough diamond. Average prices received for rough thus decline by 23.5% year-on-year. As a result, the Lower Orange River operations, which are earning the end of their reserves, moved into loss overall,” says Bernard van Rooyen, Trans Hex Chairman in the company financials.
Piet Viljoen, Alternate Director at Trans Hex, says its share price has come under pressure but the business has tried to ride the storm.
“The problem creates value in a very lumpy way. It earns a lot of money one year and then makes big losses the next year… so its share price doesn’t seem to go anywhere ever, that’s why it creates the impression that the business is under pressure,” he says.
Viljoen says it helps to have shareholders like Wiese who have vision.
“The shareholder reference can act as a provider of capital when the business needs it, do acquisitions or to fund projects.”
Trans Hex Group incurred a disappointing loss of R100.8 million ($7.3 million) and Viljoen has called it “a difficult year” but Wiese is optimistic.
“It is going well, except the exchange rate is not in favor of diamond exports because the rand is stagnant. With the diamond industry, you are not running a shop where you always know what your sales are going to be,” says Wiese.
Wiese is known for taking risks and smart investments. More than 60% of his wealth is in Shoprite and Steinhoff, while another 30% or so comes from his shares of investment company, Brait. His stock in Tradehold, a real estate firm, accounts for much of the remaining 10%. He has made investments in the United Kingdom (UK) such as clothing retailer New Look and gym chain Virgin Active. He says there is no secret behind the success.
“In this company, we have always had a philosophy, in terms of which we run our group of companies. These are the five pillars as we call it; faith, positive thinking, enthusiasm, compassion and hard work. Hard work is probably important but you’ve got to be a positive person and able to put teams together and motivate them. I am not a person running the business, I play a different role. The good business leaders like Whitey Basson and Markus Jooste are people who can put teams together, motivate them and steer them in the right direction,” he says.
There have been several enormous setbacks like the currency upset in 1985 when the rand lost about 50% of its value in less than a year, Brexit, which badly affected the share price, and great disappointments in people. It is wealth that hasn’t come easy.
“Oh yes, plenty [of bad investments]. I can’t even remember the worst one but there are many adventurous investments that just didn’t work out. I am heavily invested in wine farming and that’s not a very big lucrative business but it gives other pleasures such as the beauty of it…”
“A man’s true wealth is the good he does in the world,” goes the proverb. According to Wiese, success is more than how much money you have, it is about whether you can look at yourself in the mirror and say maybe it’s very small but my contribution made life or the world a slightly better place. Following this mantra, he is helping the poor gain title deeds to their homes. He is a sponsor of the Free Market Foundation, which is working with First National Bank to give people land tenure, and gave more than 100 title deeds to residents of Ngwathe, a municipality in South Africa’s Free State province.
“The Free Market Foundation looked at South Africa and found that there are between seven and 11 million households where the occupants own the structure on the land by they do not own the land, so they launched an initiative cooperating with the local, provincial governments to give people title to their homes. My family decided to get involved in that to make financial contributions in order to help people to acquire the title deeds to their homes,” he says.
“It is an enormously important thing for people to have a sense of ownership. People that are used to owning things do not realize how much it adds to a person’s dignity if he can say ‘this is my home. It may be a modest little home, but it’s my home and I can leave it to my children and be assured they have a roof over their heads.’”
Wiese says positivity rules his life.
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“If you are positive about life, you ignore the unfair criticism. A lot of the criticism is totally justified but you don’t focus on either the nice things people say to you or about you too much or equally you don’t concern yourself too much about the bad things people say…”
“I don’t remember anything bad people say. I always say to entrepreneurs, ‘if you start rising above the average, you become a target’. People say, ‘but that guy is not cleverer than I am, why does he make a success and I’m so clever and I don’t make the same financial successes?’ You have to know you will have people tear you down; it’s part of the game,” says Wiese.
We leave him preparing to jet off to the UK for meetings. Some may not understand his decision to dive back into diamonds, but Wiese seems to see money where others don’t.  Maybe the smart investor should take a look at the diamond business.

The Billionaire Diving Into The Depths Of The Diamond Business

It’s a gloomy summer’s day in Cape Town. A blanket of never-ending dreariness fills the skies. Bleakness has played a big part in Peter Allerstorfer’s journey to entrepreneurship. On this day, he is dressed in blue much like how he felt three years ago when he – and his partners – went into business.
This is a long way from Austria. He is overseeing the remodeling of their offices in the heart of the mother city, just as he remodeled his life when he travelled 13,500 kilometers to Africa. He swapped his well-paid job at McKinsey &amp; Company for building companies around the continent.
“I was missing something. I felt like doing something hands-on and creating something and seeing the results. I got an opportunity from Rocket Internet to build African operations and I took it,” says Allerstorfer.
He moved to Cape Town to start Zando, one of South Africa’s largest e-commerce fashion stores, and later Jumia, Nigeria’s largest e-commerce shop. He did the jobs well.
“It was a difficult thing to do because I had a promising career ahead of me. I wanted to start something entrepreneurial. We got funding and we just had to deliver the work and run the company. The company was running and we were a fully-fledged retailer.”
It was far from enough.
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“I stood there and saw all these things and realized I have put so much work on something that isn’t really mine. That’s when I realized it was time to build something on my own,” says Allerstorfer.
He co-founded Silvertree Capital, an investment company that builds businesses in Africa by bringing together new and old economy business models, with Paul Cook and Manuel Koser.
Starting his own business was hard. It also ushered in his worst day.
“We just left Zando and we didn’t know exactly what we were doing. We knew we are good in tech and e-commerce so we stuck to that… By the end of 2013, things were looking good. We launched our businesses, found an investor we were making progress,” says Allerstorfer.
They launched HealthCart, an online pharmacy, in 2013, launched an online marketing agency to service it and also launched a price comparison site.
Then trouble started.
“The investor in our e-commerce online pharmacy service business wasn’t delivering what they said they would. Also they had more control in the business and we didn’t, even though they knew less about the ecommerce industry and didn’t understand technology,” says Allerstorfer.
Over time, friction developed. To make matters worse, the investor in the price comparison company disappeared.
“He said he would put more money over time but we couldn’t get hold of him anymore. He just disappeared and didn’t fulfil his promise.”
In about six months, they reached a breaking point. July 23, 2014 was his worst day. He found out the investor in the online pharmacy business had taken over the business completely. He didn’t want to work with them anymore.
“This company was our very first baby. We had worked so hard on it and then it was just taken from us. The investor had the controlling hand in the company and there wasn’t much we could do,” he says.
To make matters more catastrophic, the investor in the price comparison business never got back to them and they were left with nothing but mounting bills.
It took them a year to figure out what to do and wasted money they didn’t have. It was these hard knocks that crafted the company’s approach to investment.
Their whole world was crumbling in front of them, so they decided to take a walk down the road for a burger and cold beer.
“We stopped chatting about what we were going to do. Paul and his wife were expecting a baby and we were wondering if we made mistakes by leaving the company we were at for this. We were stressed. If things continued like that we weren’t going to survive. We had invested a year and a half into this and so much hard work,” says Allerstorfer.
Trying to survive wasn’t easy. But they soldiered on so they could pay their 20 employees and make sure their dream didn’t go down the drain.
“We knew we understood technology, we knew how e-commerce works, but the business was just not working. We just decided to stay calm and focus on the business and keep doing what we are good at.”
Fundraising presentations saved them.
“Our first fundraising PowerPoint went out and within seven days we found investors. Things started turning around.  It reassured us in terms of what we do,” says Allerstorfer.
They worked day and night to make sure it stayed that way.
“From that day ‘til now, our revenue grew 10 times. We are happy we had these things happen so we could learn. The biggest thing was learning that, in whatever we do, we should have complete control over the business so we can make decisions and not be thrown out of projects we have worked hard on. ”
The company has now invested in 15 companies across four countries, reaching three million consumers a month. To garnish sweet victory, they managed to gain back control of the online pharmacy business, HealthCart.
“We later found out that the reason they initially pulled out is because they were going through financial troubles and tried to do fundraising but failed. They said they were closing down the business and we said no don’t and we got the company back,” he says.
Through its business-to-consumer e-commerce platforms, which include Click n Compare, Faithful to Nature, Cybercellar and the recently-acquired PriceCheck, Silvertree Capital reached 25 million unique consumers in Africa in 2015, a 50% increase on the previous year.
Not bad for an entrepreneur whose business was crumbling before his eyes on his worst day.

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The Billionaire Diving Into The Depths Of The Diamond Business

‘We Worked So Hard And It Was Just Taken From Us’