Furniture godfathers take to property.

Posted On Sunday, 27 October 2002 02:00 Published by
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The Ellerine brothers are having fun as they play with their millions, writes Adele Shevel.
The Ellerine brothers are having fun as they play with their millions, writes Adele Shevel

BUSINESS operators seek him out for advice and funding. And at times he's called in to help broker peace when things in the corporate jungle get too rough.

Eric Ellerine and his brother Sidney founded and ran Ellerine Holdings for 50 years as one of the biggest, most prominent and profitable furniture retailers in South Africa.

The brothers left Ellerine Holdings two years ago in what was supposed to be a seamless end to a glorious era: the plan was to absorb Ellerines into rival JD Group, run by former Ellerines executive David Sussman.

However, the deal was blocked by the Competition Tribunal.

But the brothers left, choosing not to remain on the board as non-executive directors.

'The best decision we made was to get out. It's enabled management, who are first-rate, to do their own thing. We've been busy on the property front,' says Eric.

Their family-owned business, Ellerine Bros, has a portfolio spanning property, equities and entrepreneurial finance.

'We're having fun,' says Eric. 'Ellerine Bros was always involved with property.'

The company has bought a share in Fourways Crossing shopping centre in the northern reaches of Johannesburg, and The Glen in the south.

'We know retail property very well. Our expertise and Sidney's knowledge of every single nook of southern Africa has been really invaluable.'

The property investments are financed through various combinations of cash and debt, and are all located in South Africa.

The second arm of Ellerine Bros' business is private equity - looking after the company's historical investments and its newer ones. 'We always take a minority stake. We're not involved in the running. And we back top-class young management teams. The only controls we have are via financial reporting and board representation.'

The latest big purchase was made a few weeks ago in furniture manufacturer Steinhoff.

The brothers also own a stake in the JD Group.

The third leg is the equity portfolio, which Eric runs.

The Ellerine brothers were founding shareholders of diversified industrial conglomerate Bidvest and have been involved in the group since 1988. Eric is chairman of financial services company Corpcapital.

The brothers were founding investors in IT company Softline and were among the founding backers of Primedia.

Eric confesses they have made mistakes, especially in the listings boom of 1997-1998.

His biggest disappointment was that 'many of the young people we backed didn't have the gumption to follow through. Some of them let me down badly.'

The criteria he looks for in a venture are hands-on involvement. Managers have to be knowledgeable, they have to have a stake in the company and be prepared to work hard to build up the business. The actual sector is irrelevant.

'The stock exchange is not only my hobby, it's my passion,' says Eric.' He's been involved in the market for more than 40 years.

Eric is on the boards of Corpcapital, Bidvest, Softline, property company Redefine, Dunlop International and media company Sasani. His biggest indulgence is cigars, and he smokes only Havanas.

How many a day?

'That's a trade secret. More than I should.'

Publisher: Sunday Times
Source: Sunday Times

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