An empowerment investment firm, born out of trade unions and run by two one-time communists, has become a bastion of capitalism and empowerment - taking top place in the group of financial companies in this year's Top Empowerment Companies survey, and fifth overall.
Hosken Consolidated Investments (HCI) is now one of the shrewdest investment firms around, amassing stakes in some of SA's most successful companies. It is also not shy to go into battle against other would-be suitors to get its hands on lucrative assets.
Only Brimstone matches HCI as a first-generation empowerment firm in the financial sector - everyone else has had to transform themselves.
"On a number of levels, HCI has tried to position itself as being a company in line with the flow of where the country is going," says CEO Johnny Copelyn.
While HCI tops this year's financial sector tables for empowerment (edging out boutique financial structuring firm Cadiz), it comes close to topping it for share price performance, too.
The group's share price has rallied close on 50% in the past year and now has a market cap of R7bn - putting it a stone's throw from better-known Alexander Forbes in market capitalisation.
HCI has generated substantial returns for its trade-union shareholders (which still hold around 40% of the firm), but has also made chairman Marcel Golding and CEO Copelyn wealthy men with over 20% between them.
Its ownership pedigree gives the firm full marks for empowerment shareholding (though Copelyn is white), one of only two financial sector firms to do so (Glenrand is the other).
HCI also tops the sector for management scores - two of its four executive directors are black (Golding and Elias Mphande) in a firm which has only a small team of directly employed staff - seven professionals - arguably making it easier to empower than banking heavyweights which, in TEC, find themselves in the same sector.
Indirect points, though, have been better scored by larger rivals which have set up determined preferential procurement and skills development efforts, areas in which HCI has been pedestrian.
As an investing firm, it also grabs easy points on the scorecard for enterprise development, giving it full marks - investing and nurturing other businesses is its core function.
Those businesses are primarily in the entertainment and gaming sectors, though HCI extends to investments in transport, financial services, construction, technology and resources.
"We like to think of ourselves as opportunistic," says Copelyn.
"We don't have any obsession with becoming an enormously big company. Either you play some key role in the strategic direction of the business - a vision you are trying to encourage the business to grow along - or else you are just there for the ride. If you get to that point I think one should unbundle the investment," he adds.
E.tv has been one of its most celebrated assets - one which at times looked a terrible investment, requiring HCI to bail out of its Vodacom stake to keep afloat.
It turned the corner as HCI built its stake to 63%, thanks to the determined efforts of Golding, e.tv's CEO. Copelyn says the business has grown 80% in the past year.
But HCI's most headline-grabbing and arduous investment has been in Tsogo Sun, owners of lucrative casino and hotel interests. HCI has for years waged a steady war to get control of Tsogo Sun Investment Holdings (TIH), the controlling shareholder of Tsogo Sun (SA Breweries holds the balance with 49%).
TIH was created with a range of small empowerment shareholders, mainly union-linked. But HCI has steadily pursued each of those stakes to build up its interest.
To do so, it has shredded through the spider's web of controlling structures sitting atop Tsogo Sun.
The biggest headline-grabbing event was its battle with Johnnic Holdings.
Johnnic held a 25% stake in an entity which held 38% of TIH, and believed it had a pre-emptive right to a further 25%.
HCI held the other 50% (though that is still subject to regulatory approvals - the Mpumalanga Gaming Board is holding the process up).
HCI went into battle, eventually getting control of Johnnic in December 2005 and swerving Johnnic out of the battle for the Fabvest stake. In August last year Copelyn was installed as CEO of Johnnic, effectively handing the winner's cheque for Tsogo Sun to HCI.
The Johnnic battle showed HCI to be street-smart and battle-ready.
But the one stubborn opponent it has been unable to beat is Nafcoc Holdings, the last man standing in the array of TIH shareholders. Nafcoc holds 25%, and has put every obstacle in HCI's way in getting hold of it.
HCI has been reduced to pulling out its cheque book, making offers to Nafcoc of unprecedented amounts - most recently a R900m offer which has been rejected by Nafcoc, according to news reports.
Nafcoc is clearly holding out for a bigger amount, knowing that it is the last obstacle to HCI's domination of Tsogo.
The next chapter in the game, though, will begin when SABMiller decides to dispose of its 49% stake in the ultimate operating company - a move it has said it will make, though it has never said when.
Such a move by SAB will get HCI salivating for that stake, and TIH holds a pre-emptive right to it.
Johnnic is now being used for a new business venture and has invested in a US private equity concern, with interests in natural gas, providing an efficient way to use up Johnnic's cash resources.
This signals further globalisation for HCI and is its first investment in the US. It has been building e.tv in other African markets, too, and is looking to get its hands on a new satellite broadcasting licence in SA.
Copelyn and company are not sitting back any time soon.
