Actually, this guy is for real...

At this year's Sunday Times Top 100 Companies awards ceremony, some people were surprised to discover that Allan Gray is flesh and blood, writes Marcia Klein

Everybody knows Allan Gray, the high-profile, high-performance investment management company.

But until the Sunday Times announced that Allan Gray was to receive the Top 100 Companies Lifetime Achiever award for 2010, many had not realised he was actually a person.

The elusive man, who has lived in Bermuda for many years, keeps a very low profile. Gray believes in staying out of the limelight, letting the performance of his companies - he started Orbis Funds in Bermuda in 1990 following the success of Allan Gray Ltd, set up in the '70s - and the family's charitable foundations speak for themselves.

Ahead of his award in November, Gray, in a rare e-mail interview, said the most important investment advice he could give was to "take a long-term perspective".

He said investors should steer clear of the bond market in the next few years.

Gray, who has a Harvard MBA and was South Africa's first chartered financial analyst, said that when he set up his business he "never for one moment envisaged the scale of its subsequent success, which is mainly due to the continuity provided by several generations of outstanding executives invariably promoted from within the firm".

The formula has barely changed since Allan Gray's inception: value-based investment, picking stocks that are trading at a substantial discount to the team's assessment of their intrinsic value.

Since leaving South Africa in 1988 to start Orbis, Gray has been more involved in the Bermuda-based firm, managed by his son, William. But his family is still a major shareholder in Allan Gray, and he visits South Africa at least once a year. Locally, his involvement is more with the Allan Gray Orbis Foundation, although he does not hold any formal office and has no governing authority at the foundation.

The foundation, started in 2005 as part of Allan Gray's empowerment transaction and backed by a R1.15-billion endowment from Gray himself, provides full scholarships for promising students and school pupils, with the aim of developing leaders and entrepreneurs.

Currently, 210 fellows are studying with full scholarships at seven South African universities, and 78 pupils are attending some of the leading high schools in the country.

Restructuring of Orbis and Allan Gray is also under way to ensure that the family's profits from its stakes in the businesses will be used for philanthropy.

Gray and his wife, Gill, started the Allan & Gill Gray Charitable Trust in 1979, and in 2008 launched the Allan & Gill Gray Children's Education Fund, which pays the school and university fees of the children of all Allan Gray employees who earn less than R300000 a year.

The Top 100 Companies top company was Capitec, the Stellenbosch-based no-frills bank which has taken the South African banking sector by storm.

Capitec is ranked first in the Top 100 Companies for 2010 because a R10000 investment in the fast-growing company five years ago was worth R79090 at the end of September, making it the best investment on the JSE over the past five years.

Growth in share price and earnings is a reflection of Capitec's phenomenal success - it signs up about 70000 new clients each month, and reached 2.5 million by September. The client base has grown 42% in 12 months.

Capitec listed at the height of the crisis in the small banking sector in 2002 - a week after the collapse of Saambou. But unlike many of the banks who failed or took serious pain then, Capitec has gone from strength to strength and has since emerged from another financial crisis unscathed.

In the six months to August, profit grew 59% to R283-million. Headline earnings grew by 58% to 340c a share.

CEO Riaan Stassen said the success was partly due to Capitec being customer focused. This is reflected in it having extended banking hours and making sure its customers understand what it is doing with their money or when it loans them money. It is also able to pass on its low costs to its customers.

Since its 2002 listing, Capitec's headline earnings have increased by more than 35% a year. It has transformed from being a micro-lender into a general retail bank, offering loans, savings accounts and transactions via branches, cards, the internet, ATMs and partners.

It is the only South African brand to be named one of the Great Brands of Tomorrow in an international report by financial services group Credit Suisse.

In its nine years, it has grown to the extent that it planned to have close to 480 branches by the end of this year.

Capitec came into being through the backing of PSG Group, which now controls 35%, while 26% of the group is controlled by the board and management. BEE groups and the staff share 16%. This tight structure makes buying large chunks of its shares difficult, but those who have invested have been handsomely rewarded.

The other major award winner, Discovery CEO Adrian Gore, was voted by the CEOs of SA's Top 100 companies as the Business Leader of the Year.

He started Discovery in his mid-20s with capital of R10-million; it is now a R20-billion company.

The Discovery group spans health and life insurance and other financial services. Its products (and the complex actuarial models and processes that support it) are a major attraction for international medical schemes. China's Ping An Health, a subsidiary of the third-largest insurer in the world, is interested in Discovery's intellectual capital, hence the announcement in August that Discovery will buy 20% of Ping An.

For similar reasons, Discovery acquired 50% of the UK's PruHealth and PruProtect, and health insurers in the US, where it is working hard to revitalise the Vitality brand, are increasingly interested.

"South Africa is quite unique. On the one hand, it's hugely sophisticated, on the other it is still developing. We've had to build some unique skills here in insurance; the ability to run a health insurer in a very complex market. I think that's what appeals to a company like Ping An," said Gore.