Presenter: Lindsay Williams  Guest(s): Wolf Cesman 

LINDSAY WILLIAMS: Wolf, congratulations - how did it go?

WOLF CESMAN: I think it went very well. The market as you know was a bit wobbly, but we placed our units at R5 and I think it closed at about R5.16 and 3.7-million units were traded so we’re very happy.

LINDSAY WILLIAMS: That’s good volume, and you bucked the bearish trend - so that’s an extremely successful listing. Let’s have a look at the history of Madison - it’s one of the largest property asset managers in South Africa of funds with a combined market capital of R16-billion including Hyprop, ApexHi…

WOLF CESMAN: …and Redefine.

LINDSAY WILLIAMS: So you’re like a property fund of funds - because they’re already listed…

WOLF CESMAN: I think the difference between us and the funds - the funds own property. We actually don’t own property - we’re the asset manager, and we’re a fee-based business. We get paid a fee based on the enterprise value of the funds - and we obviously provide the management expertise to run those funds.

LINDSAY WILLIAMS: So there’s some sort of arbitrage opportunity here between Madison and those three - I’m trying to work out which offers the best exposure to the retail investor that’s listening now?

WOLF CESMAN: What’s quite interesting is those funds are probably trading on a yield of about between 6% and 7% - our forward projection is 10%.

LINDSAY WILLIAMS: So you think Madison is the preferred route?

WOLF CESMAN: I think that when the markets settle there could be a re-rating.

LINDSAY WILLIAMS: You say in your press statement: “The listing of Madison has provided an opportunity for investors to participate in a unique high-yielding instrument in the listed property sector, etcetera.” Apart from the advantage to the retail investors in this listing - what’s your advantage?

WOLF CESMAN: Our advantage - I suppose to a degree we now have a currency with which we believe we can grow our funds, and grow our business. We have a currency that can attract intellectual capital, and as I said we believe that having an additional currency can give us a competitive advantage in growing the funds under management.

LINDSAY WILLIAMS: Are you finding a shortage of skills, and will this sort of listing attract those skills?

WOLF CESMAN: Yes, certainly.

LINDSAY WILLIAMS: Otherwise for the money that’s now sitting around - is there any immediate plan for it?

WOLF CESMAN: No, in fact there is no money because - the money was actually utilised to pay out our partners who were Standard Bank. It was Standard Bank who enabled us to effect the IPO - they decided they didn’t really want to be part of a listed company. We’ reduced our stakes marginally - between my partner Mark Wainer, myself and our black empowerment partner we own about 40% of the company. There was a question put to me recently - do we intend selling our shares? The answer is no. So certainly 40% is there. We have attracted a lot of good institutional investors, and one of the unique features is that in our public offer we enabled the unit holders in our existing funds to participate. I think 2,500 of those unit holders are now unit holders in Madison. So there’s a complete circle - they’ve got an interest in the properties, and they’ve got an interest in the management company.

LINDSAY WILLIAMS: Madison’s range on the day was R5.25 at the high and R5.05 on the low - the closing price was R5.12 or 12 cents above the pre-listing price.