Extract from Portfolio Manager Commentaries – Sept 2022

RMI has been one of the top performing shares on the SA market over the past year. Following the announcement in September 2021 of the unbundling of its stakes in Discovery and Momentum Metropolitan Holdings as well as the disposal of its stake in the UK property and casualty insurer Hastings, RMI has continued to perform strongly. Proceeds from the disposal have been applied to paying down debt and returning excess capital to shareholders. We consider the remaining business OUTsurance to be one of the more attractive growth businesses in our market as it expands beyond the domestic personal lines insurance core business into adjacent insurance markets and other territories. The company is run by a highly entrepreneurial and energised management team that is closely aligned with shareholders by virtue of their 10% shareholding in the business. The share currently trades at a small discount to the valuation disclosed by management in the latest NAV stack-up, which following the group restructure will likely not be disclosed again. We believe the market anchors off this number, which fundamentally undervalues the business.