RH Bophelo is SA’s first black-owned and managed healthcare listing. What message does this send?

That there can be solutions outside of the normal incumbents. The government is at a serious crossroads in achieving good healthcare for all. It lacks partners prepared to have much more progressive engagements with it, so now there’s a bunch of fights and everyone’s unhappy. For us, it’s about transformation and supporting a much bigger picture.

What numbers are you sitting on?

Our unlisted portfolio is R2,8 billion and we want to grow that to R40 billion. We’re not showing off yet, but we’ll get to that figure: there are too many problems [in the existing structure] for us not to.

Where does RH Bophelo fit into the RH Managers private equity firm structure?

RH Managers was formed in 2013 and RH Bophelo, which listed in July 2017, is a newer listed fund, a permanent capital vehicle. At the moment, we’re building new infrastructure and consolidating existing infrastructure under one umbrella. Because we’re capital-hungry, we’re looking at investors with different risk appetites, so we’re offering different vehicles: our group structure’s set up for that. Our European investors, for example, will be making use of an unlisted vehicle called RH Africa.

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Does that imply rolling out the model to the rest of Africa?

Yes – we’ve already started doing so. We’ve lined up about eight European investors for the RH Africa fund and we’re taking the learnings to the rest of the continent, starting in East and southern African, in Tanzania, Angola, Zambia, Botswana, Mozambique, Swaziland and Rwanda.

Why the healthcare sector?

Because there are so many things that aren’t working on the continent and nobody’s happy. In SA, the wealthy think they’re being ripped off and overcharged, while for the poor, the sector’s just overcrowded and offers very poor delivery. So it’s an industry where opportunity is significant.

Your fund is challenging private healthcare providers Mediclinic, Netcare and Life Healthcare. Do you see yourself vying for their 20% of the population, or do you hope to open up the market?

We’re looking to take another 20% from what the government’s covering – ie, the top end of the less affordable range. Essentially, we’re saying the private sector should cover about 40-50%. 

Since National Health Insurance (NHI) has received the green light, sparking concerns of private healthcare being under attack, is it challenging to raise money?

It’s definitely challenging in that you have to explain yourself, but if you [aim to be] an access point for the affordability platform, then you definitely want NHI, because that means everyone will have healthcare insurance. I think the criticism comes from two fronts: firstly, that the medical insurers will lose out – so they definitely aren’t going to say anything nice about us – and secondly, that the incumbent hospitals are pretty fine, just covering the 14-20%, and NHI will reduce their margins.

Can we transform healthcare without transforming the medical aid industry?

Yes. I don’t think medical aids are really opinionated about who delivers the service. They just want to get the service for the cheapest price. The insurance sector itself needs to be transformed because it has too much power. It controls both what you pay as a patient and what it pays to the hospitals or practitioners.

You’ve taken a different stance from the dominant big three in that you’re collaborating with government. What does that entail?

Basically, idea generation and giving government more insight into different models, because right now everyone’s fixated on one way of doing things – and that’s never a good thing. But there are always ways of making it work. It’s a mammoth initiative, but the theory makes sense.

RH Bophelo’s BEE status will give you access to concessions and hospital licences. What does that mean in practice?

These licences are issued by the provinces and there’s a very big push not to give them to the big three, because they have too much already. Ironically, they’re giving licences to new players who also do nothing, because they don’t have the technical expertise or the capital. Our structure was formed to intermediate this problem. We need to put money in and we need to put technical expertise into play.

You also want to create a home for black doctors, who are often shut out by the old guard.  Tell us about that.

Black doctors are struggling to get into mainstream hospitals. Hospitals are almost like clubs: when you’re in, then you have an inside view and can control who else comes in – and this isn’t something that can be regulated. Basically, you have to cosy up to the incumbents; to the old club. In addition, doctors aren’t allowed to be employed by hospitals, so basically they become entrepreneurs from day one. That’s not everyone’s cup of tea.

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Do you find the black community supporting black business?

No, no, no. Black people are also sceptical of black business. It’s as if everybody’s focused on the old and trusted, so you have to work doubly hard to convince your black counterparts to support you. The black economy isn’t yet driving in the same direction, which is why we don’t have a black-owned supermarket or a black bank. Nobody can consolidate black power into one economic powerhouse and just deliver a service. [It requires] a culture change.

How do you start to galvanise support?

There are definitely trailblazers, but I don’t hear enough consumers saying: “I want to go into this company because it’s black-owned.” There’s a big push for corporates to procure black, but grassroots retail black support isn’t there. They actually associate non-black-owned organisations with better quality or service, so that’s a self-inflicted situation. Some black businesses have indeed let people down, so we need black-owned centres of excellence. The likes of MTN have done well and we should have built on that in the medical, banking, FMCG and other sectors.

What are your goals for the next five to 10 years?

Personally, to use my skills set not just in business, but in changing society. On a business level, I want to create a big company with a slightly different approach – less of a profit-outcome relationship. That’s very difficult to do because once you have shareholders, they want the most, but we’ll try.

Do you subscribe to the inclusive economy, shared-value view of business?

It’s the most sustainable platform. If you get more people involved and create more jobs, then it creates a better society.

What are your views on upskilling the continent for the Fourth Industrial Revolution? 

To build something, you need to look at the basics – and that’s where South African education has failed spectacularly. Everybody forgot that you need to read, write and comprehend before you start putting things into the stratosphere. If you don’t have those basics, then you’re completely excluded from the economy and you have a tough time ahdad of you. The Fourth Industrial Revolution’s going to be on a very intellectual level and we have to prepare the next generation not to get distracted or become blinkered. 

Are you married?

Yes – and we have three sons: a 16-year-old and 10-year-old twins. My wife used to work in banking, at FNB, but she’s just completed her PhD.

What do you do in your downtime?

I chill over weekends: we go to church and eat too much!

Zunga at a glance

  • Born in Chipinge, Zimbabwe, and raised in Mutare.
  • 1999 – Graduated with a business science and computer science degree from the University of Zimbabwe.
  • 2004 – Obtained an MSc in finance from the University of London. He completed the degree via correspondence through the university’s School of Oriental & African Studies.
  • 2005 – Spent six months on Barclays: Zimbabwe’s graduate training programme. “They take you around the world and you see a lot of places, which changes your perspective.”
  • 2001-2007 – Worked in investment banking at Barclays: Zimbabwe.
  • 2007 – Transferred to Absa Capital in SA when Barclays bought Absa.
  • 2007-2011 – Worked for Merrill Lynch SA just before the credit crunch, heading its debt capital markets for SA and sub-Saharan Africa. During this period, the Bank of America took over Merrill Lynch.
  • 2011 – Formed Arkein Capital Partners, a passive fund for the Sishen Iron Ore Company community trust, which holds the community shares for Kumba.
  • 2013 – Started RH Managers, a healthcare-focused private equity firm.
  • 2017 – The RH Bophelo subsidiary was listed on the JSE.

–Cara Bouwer