Desert Lion Capital

Investor Summary

Rudi van Niekerk is a South African citizen with extensive experience in South African listed equities since 2013. His background spans private equity, grain trading, and academia. Van Niekerk founded Desert Lion Capital in April 2019 with seed funding from Greenhaven Road Partners Fund and Charles M. Royce. He maintains the majority of his personal wealth invested alongside fund investors, demonstrating strong alignment of interests. Van Niekerk is described as an outspoken expert for investing in South Africa, following a long-term-oriented value approach in an inefficient market. He serves as managing member of the general partner and signing officer for SEC filings.

Fund Strategy

Desert Lion Capital employs fundamental, opportunistic, value-oriented, patient, contrarian, and concentrated investing, maintaining 7 to 15 holdings with deep business understanding. The fund operates on the principle that risk is the probability of permanent loss of capital, not volatility. The strategy emphasizes that superior performance requires doing something different from the majority. The fund invests exclusively in South African listed equities, capitalizing on an inefficient market with many hidden opportunities. Despite South Africa having highly developed financial markets, the equity market remains unfrequented with embedded pricing inefficiencies. The approach leverages the structural advantage of lengthening time horizons and focuses on acquiring good quality assets at cyclically depressed valuations.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
9.2%	6.5%	6.5%

Executive Summary

Desert Lion Capital Fund returned -0.7% net in March 2026 versus -17.4% for the JSE All Share Index, bringing year-to-date returns to +6.5% net versus -4.8% for the benchmark. The fund's concentrated portfolio of 8-15 high conviction South African equity holdings demonstrated its differentiated characteristics during broad market weakness, benefiting from positions like Sasol while other holdings held up well. The manager highlighted iOCO, a top-6 position built over the past year, as an example of the fund's value-oriented approach. iOCO, formerly the troubled EOH, has undergone significant governance and operational transformation under new leadership, improving metrics like EBIT margins from 2% to 8% and return on invested capital from 5% to above 20%. Trading at 8x PE with 14% free cash flow yield, the manager expects double-digit earnings growth enhanced by buybacks and acquisitions. The fund remains open for investment, with the manager believing a cyclical rotation into emerging markets, commodities and value is underway, all positive factors for the strategy.

Forward Outlook

The manager expects the fund to continue delivering index-beating returns with differentiated and lowly correlated performance. Returns are expected to be more volatile but not riskier than alternatives, coming in chunks. The manager believes there is a cyclical rotation underway into emerging markets, commodities and value, all positive for the fund.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Apr 15 2026	2026 Q1	IOC.JO, SOL.JO	emerging markets, Governance, South Africa, turnaround, value	-	Desert Lion Capital's concentrated South African equity strategy outperformed significantly in March's market selloff, demonstrating low correlation benefits. The fund's value-oriented approach targets mispriced opportunities like iOCO, a transformed IT services company trading at attractive multiples with strong operational improvements. Manager sees favorable cyclical rotation into emerging markets and value ahead.
Jan 6 2026	2025 Q4	ALSH, J203	emerging markets, liquidity, re-rating, valuation, value	-	Desert Lion Capital delivered 20.2% net returns in 2025, investing in concentrated, undervalued South African small and mid-cap companies. With improved fiscal outlook, declining bond yields, and returning liquidity, the manager believes they are in early innings of a multi-year cycle of South African equity outperformance versus U.S. markets.
Dec 5 2025	2025 Q3	ACS.JO, ARA.JO, ART.JO, HCI.JO, IOC.JO, KRO.JO, LEW.JO, SDO.JO, SOL.JO	Buybacks, dividends, Industrial, JSE, real estate, small caps, South Africa, value	ACS SJ ART SJ ARA SJ LEW SJ	Desert Lion's South African small-cap portfolio delivered 3.7% in November as fundamentally strong companies trade at deeply dislocated valuations. Portfolio holdings like Acsion, Argent, and Lewis demonstrate exceptional value metrics while actively returning capital through buybacks and dividends. Early signs suggest renewed interest in this overlooked segment as bond inflows reduce discount rates.
Jul 23 2025	2025 Q2	ART.JO, CPI.JO, HCI.JO, IOC.JO, KRO.JO, SDO.JO	Buybacks, dividends, earnings, Industrial, South Africa, value	ART SJ ART.JO	Desert Lion focuses on undervalued South African equities trading at deep discounts despite strong fundamentals. Argent Industrial exemplifies this approach, trading at 4× P/E while compounding EPS at 30% annually through excellent capital allocation. With improving macro backdrop including declining bond yields and potential emerging market flows, current valuations offer compelling risk-adjusted returns.
Mar 31 2025	2025 Q1	ART.JO, CWL.JO, HCI.JO, KRO.JO, SDO.JO, SOL.JO	Concentration, Education, small caps, South Africa, value	SDO.JO	Desert Lion's concentrated South African equity strategy underperformed in Q1 while recycling capital into new high-conviction positions. Core holdings like education company Stadio demonstrate structural growth opportunities in neglected markets. The manager welcomes volatility as deployment opportunity, emphasizing strong portfolio fundamentals and significant valuation discounts versus expensive U.S. markets.
Feb 1 2025	2024 Q4	ARI.JO, CLC.JO, KRO.JO, LEW.JO, SDO.JO, SOL.JO	Cyclical, emerging markets, infrastructure, Privatization, South Africa, value	-	Desert Lion delivered 34% returns in 2024 as South African equities inflected from underperformance to outperformance. Manager sees early stages of cyclical uptrend driven by improving fundamentals, infrastructure privatization ending blackouts, and scope for rate cuts. Despite re-rating, stocks remain compellingly valued with meaningful capital flows yet to arrive.
Oct 17 2024	2024 Q3	CGR.JO	Development, Housing, Property, South Africa, value	CGR.JO	Desert Lion delivered 36.6% YTD returns by finding deep value in inefficient South African equities. Their concentrated portfolio includes Calgro, an affordable housing developer up 100%+ but still trading at 3x PE despite 29% EPS growth. Manager sees South Africa's improving fundamentals and cheap valuations as early-stage opportunity others cannot access.
Jul 8 2024	2024 Q2	-	concentrated, Politics, Reform, South Africa, value	-	Desert Lion outperformed significantly as South Africa's Government of National Unity signals political shift toward market-friendly policies. New Cabinet appointments show meaningful improvement across key portfolios. Private sector optimism is building while global markets still discount failed state scenarios, creating attractive opportunities for patient capital in a resilient economy poised for recovery.
May 13 2024	2024 Q1	ARA.JO, HCI.JO, KRO.JO	Mining, oil, South Africa, Tourism, value	HCI.JO KRO.JO ARA.JO	Desert Lion Capital targets mispriced South African equities through concentrated value investing, leveraging local expertise to navigate political risk concerns. The fund's top holdings include HCI with transformative Orange Basin oil exposure, technology compounder Karooooo, and Astoria trading at 50% NAV discount. Manager sees significant price dislocations creating compelling long-term opportunities for patient capital.
Jan 25 2024	2023 Q4	KRO, SBSW	Concentration, emerging markets, Mining, small caps, South Africa, value	-	Desert Lion's South African small-cap portfolio trades at 5x PE with 20% earnings yield despite strong fundamentals, creating asymmetric opportunity. Two years of multiple compression from global allocator aversion and domestic challenges have driven valuations to extreme levels while company quality has actually improved through natural selection and operational optimization.
Oct 27 2023	2023 Q3	KARO.JO, MST.JO, SDO.JO, SGL.JO	Capitulation, emerging markets, JSE, Relative Performance, South Africa, value	-	Manager makes unequivocal call that South African equities are bottoming after 16 years of underperformance versus US markets. Extreme value opportunities exist with companies at 3-4 PE ratios despite strong fundamentals. Foreign capitulation has reached maximum with investors at half benchmark weight. Private sector addressing infrastructure challenges while political headlines mask strong business fundamentals.
Jul 15 2023	2023 Q2	ART.JO	Capital Allocation, Industrial, small cap, South Africa, value	ART.JO	Desert Lion Capital delivered strong June performance through concentrated South African value investing. Manager highlights Argent Industrial as prime example of market inefficiency - industrial conglomerate with 40% EPS growth trading at sub-4x PE despite exceptional capital allocation and global diversification. Fund leverages local knowledge to identify undervalued companies trading at South African discounts.
Apr 19 2023	2023 Q1	SDO.JO	compounders, Concentration, Education, South Africa, value	SDO SJ	Desert Lion's concentrated South African equity strategy underperformed in Q1 while recycling capital into new high-conviction positions. Core holdings like Stadio continue demonstrating strong fundamentals with significant operating leverage. The manager views current weakness as opportunity, believing their neglected South African market offers exceptional value versus expensive U.S. markets.
Jan 2 2023	2022 Q4	ART SJ, NPN SJ	-	-

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Apr 15 2026

2026 Q1

IOC.JO, SOL.JO

emerging markets, Governance, South Africa, turnaround, value

Desert Lion Capital's concentrated South African equity strategy outperformed significantly in March's market selloff, demonstrating low correlation benefits. The fund's value-oriented approach targets mispriced opportunities like iOCO, a transformed IT services company trading at attractive multiples with strong operational improvements. Manager sees favorable cyclical rotation into emerging markets and value ahead.

Jan 6 2026

2025 Q4

ALSH, J203

emerging markets, liquidity, re-rating, valuation, value

Desert Lion Capital delivered 20.2% net returns in 2025, investing in concentrated, undervalued South African small and mid-cap companies. With improved fiscal outlook, declining bond yields, and returning liquidity, the manager believes they are in early innings of a multi-year cycle of South African equity outperformance versus U.S. markets.

Dec 5 2025

2025 Q3

ACS.JO, ARA.JO, ART.JO, HCI.JO, IOC.JO, KRO.JO, LEW.JO, SDO.JO, SOL.JO

Buybacks, dividends, Industrial, JSE, real estate, small caps, South Africa, value

ACS SJ
ART SJ
ARA SJ
LEW SJ

Desert Lion's South African small-cap portfolio delivered 3.7% in November as fundamentally strong companies trade at deeply dislocated valuations. Portfolio holdings like Acsion, Argent, and Lewis demonstrate exceptional value metrics while actively returning capital through buybacks and dividends. Early signs suggest renewed interest in this overlooked segment as bond inflows reduce discount rates.

Jul 23 2025

2025 Q2

ART.JO, CPI.JO, HCI.JO, IOC.JO, KRO.JO, SDO.JO

Buybacks, dividends, earnings, Industrial, South Africa, value

ART SJ
ART.JO

Desert Lion focuses on undervalued South African equities trading at deep discounts despite strong fundamentals. Argent Industrial exemplifies this approach, trading at 4× P/E while compounding EPS at 30% annually through excellent capital allocation. With improving macro backdrop including declining bond yields and potential emerging market flows, current valuations offer compelling risk-adjusted returns.

Mar 31 2025

2025 Q1

ART.JO, CWL.JO, HCI.JO, KRO.JO, SDO.JO, SOL.JO

Concentration, Education, small caps, South Africa, value

SDO.JO

Desert Lion's concentrated South African equity strategy underperformed in Q1 while recycling capital into new high-conviction positions. Core holdings like education company Stadio demonstrate structural growth opportunities in neglected markets. The manager welcomes volatility as deployment opportunity, emphasizing strong portfolio fundamentals and significant valuation discounts versus expensive U.S. markets.

Feb 1 2025

2024 Q4

ARI.JO, CLC.JO, KRO.JO, LEW.JO, SDO.JO, SOL.JO

Cyclical, emerging markets, infrastructure, Privatization, South Africa, value

Desert Lion delivered 34% returns in 2024 as South African equities inflected from underperformance to outperformance. Manager sees early stages of cyclical uptrend driven by improving fundamentals, infrastructure privatization ending blackouts, and scope for rate cuts. Despite re-rating, stocks remain compellingly valued with meaningful capital flows yet to arrive.

Oct 17 2024

2024 Q3

CGR.JO

Development, Housing, Property, South Africa, value

CGR.JO

Desert Lion delivered 36.6% YTD returns by finding deep value in inefficient South African equities. Their concentrated portfolio includes Calgro, an affordable housing developer up 100%+ but still trading at 3x PE despite 29% EPS growth. Manager sees South Africa's improving fundamentals and cheap valuations as early-stage opportunity others cannot access.

Jul 8 2024

2024 Q2

concentrated, Politics, Reform, South Africa, value

Desert Lion outperformed significantly as South Africa's Government of National Unity signals political shift toward market-friendly policies. New Cabinet appointments show meaningful improvement across key portfolios. Private sector optimism is building while global markets still discount failed state scenarios, creating attractive opportunities for patient capital in a resilient economy poised for recovery.

May 13 2024

2024 Q1

ARA.JO, HCI.JO, KRO.JO

Mining, oil, South Africa, Tourism, value

HCI.JO
KRO.JO
ARA.JO

Desert Lion Capital targets mispriced South African equities through concentrated value investing, leveraging local expertise to navigate political risk concerns. The fund's top holdings include HCI with transformative Orange Basin oil exposure, technology compounder Karooooo, and Astoria trading at 50% NAV discount. Manager sees significant price dislocations creating compelling long-term opportunities for patient capital.

Jan 25 2024

2023 Q4

KRO, SBSW

Concentration, emerging markets, Mining, small caps, South Africa, value

Desert Lion's South African small-cap portfolio trades at 5x PE with 20% earnings yield despite strong fundamentals, creating asymmetric opportunity. Two years of multiple compression from global allocator aversion and domestic challenges have driven valuations to extreme levels while company quality has actually improved through natural selection and operational optimization.

Oct 27 2023

2023 Q3

KARO.JO, MST.JO, SDO.JO, SGL.JO

Capitulation, emerging markets, JSE, Relative Performance, South Africa, value

Manager makes unequivocal call that South African equities are bottoming after 16 years of underperformance versus US markets. Extreme value opportunities exist with companies at 3-4 PE ratios despite strong fundamentals. Foreign capitulation has reached maximum with investors at half benchmark weight. Private sector addressing infrastructure challenges while political headlines mask strong business fundamentals.

Jul 15 2023

2023 Q2

ART.JO

Capital Allocation, Industrial, small cap, South Africa, value

ART.JO

Desert Lion Capital delivered strong June performance through concentrated South African value investing. Manager highlights Argent Industrial as prime example of market inefficiency - industrial conglomerate with 40% EPS growth trading at sub-4x PE despite exceptional capital allocation and global diversification. Fund leverages local knowledge to identify undervalued companies trading at South African discounts.

Apr 19 2023

2023 Q1

SDO.JO

compounders, Concentration, Education, South Africa, value

SDO SJ

Desert Lion's concentrated South African equity strategy underperformed in Q1 while recycling capital into new high-conviction positions. Core holdings like Stadio continue demonstrating strong fundamentals with significant operating leverage. The manager views current weakness as opportunity, believing their neglected South African market offers exceptional value versus expensive U.S. markets.

Jan 2 2023

2022 Q4

ART SJ, NPN SJ

QUARTER	THEMES	TAGS
2026 Q1	Value The fund follows a value-oriented investment process, seeking companies with superior growth fundamentals and lower valuation multiples. This presents an appealing setup of lower risk thanks to margin of safety and higher prospective returns from the combination of growth and optionality of multiple expansion to fair value.	Value Mispricing Margin of Safety Multiples Undervalued
	South Africa The fund focuses exclusively on South African listed equities, leveraging local on-the-ground presence and knowledge. The manager believes there is a cyclical rotation underway into emerging markets, commodities and value, all of which are positive for the fund.	South Africa JSE Emerging Markets Local Knowledge
	Corporate Governance The iOCO case study demonstrates the importance of governance transformation. Under new leadership, the company implemented governance reforms, overhauled the board, and established proper controls after a history of corruption and poor governance at predecessor EOH.	Governance Management Turnaround Controls
2025 Q4	South Africa Manager believes South African equities are in early stages of outperformance cycle after bottoming in 2023. Fundamentals have improved materially with better fiscal, economic, and inflation outlook. Liquidity flowing back into SA capital markets with bonds experiencing strong demand and 10-year yield declining from 10.3% to 8.2%.	South Africa JSE Emerging Markets Relative Value
	Gold Large-cap precious metals miners including gold producers drove JSE All Share Index performance with 295% rally during 2025. Gold and platinum group metals together make up roughly 26% of the index and were primary driver of the index's 57% return.	Gold Precious Metals Mining Commodities
	Value Fund focuses on underappreciated and overlooked companies with superior fundamentals and dislocated prices. Portfolio companies continue to grow intrinsic value at better-than-expected rates yet valuations remain depressed. Manager expects combination of earnings growth and valuation normalization to drive returns.	Value Investing Undervalued Fundamentals Intrinsic Value
2025 Q3	Value Portfolio companies trading at deeply dislocated valuations with strong fundamentals. Acsion trades at 0.3 times book value and 4 times earnings. Argent trades at 6 times earnings or 4 times excluding cash. Lewis trades at 5 times earnings with 11% dividend yield.	Undervalued Discount Cheap Book Value Earnings Multiple
	Buybacks Multiple portfolio companies actively repurchasing shares at attractive valuations. Acsion buying back shares at deep discount with insider accumulation. Argent accelerating share buybacks at value-accretive prices.	Share Repurchase Capital Return Value Accretive Insider Buying
	Dividends Portfolio companies maintaining and paying attractive dividend yields. Lewis offers dividend yield of about 11%. Acsion is paying dividends while maintaining low gearing.	Dividend Yield Income Distribution Cash Flow
2025 Q2	Value The portfolio contains several names with significant embedded upside trading at deeply depressed valuations. Argent Industrial trades on an ex-cash P/E of below 4× despite strong fundamentals, representing a textbook mispricing of a high-quality, globally diversified, cash-generating company. This is a classic case of a global business trading at South African discounts.	Valuation Mispricing Discount P/E Undervalued
	Buybacks Argent Industrial has repurchased about 43% of its shares at deep discounts over the past nine years. With the company trading on an ex-cash P/E of below 4×, such buybacks are hugely accretive to shareholders. Management has indicated that repurchases will resume after being paused for acquisitions.	Share Repurchases Capital Allocation Accretive Shareholder Returns Management
	Dividends Argent Industrial has reinstated a dividend after several years without one, with cash conversion exceeding 100%. The company expects dividends to grow sustainably from the current base, which should place Argent on the radar of additional market participants.	Dividend Growth Cash Conversion Yield Income Sustainable
	Earnings Argent Industrial's EPS was up 12.5% and has compounded at 30% per annum over the past six years. The manager sees another year of strong EPS growth ahead, driven by organic expansion, disposal of low-return divisions, resumed share buybacks, and full-year inclusion of recent acquisitions.	EPS Growth Compounding Organic Growth Acquisitions Performance
2025 Q1	Education Stadio operates for-profit higher education in South Africa with strong operating leverage, growing from 8% student growth to 14% revenue growth and 28% EPS increase. The supply-demand dynamics are compelling as fewer than 40% of qualified matriculants can be accommodated in the public system due to government-subsidized university collapse. Stadio has a clear runway to double its student base from 50,000 to over 100,000.	Higher Education Student Growth Private Education South Africa Operating Leverage
2024 Q4	Infrastructure Spending Massive private sector capex in electricity generation has ended 5+ years of rolling blackouts. Huge waves of private and public sector capex are heading towards infrastructure spend in rail, roads, ports, water and energy with a multiplier effect.	Infrastructure Capex Electricity Rail Ports
	South Africa The political and operating environment in South Africa is improving. There is a strong trend towards privatization of parastatals by stealth as government increasingly partners with private enterprise to address infrastructure deficiencies.	South Africa Political Privatization Government Reform
2024 Q3	Affordable Housing Calgro is a residential property developer focused on affordable housing in South African metropolitan areas of Gauteng and Cape Town. The company benefits from solid demand due to an affordable housing backlog and improved economic outlook.	Housing Development Residential Affordable Property
2024 Q2	South Africa Following the election, South Africa formed a Government of National Unity (GNU) representing a shift towards the center and potentially more market-friendly policies. The new Cabinet shows meaningful improvement in key portfolios, with better leadership that should reduce corruption and socialist policy formation. The private sector mood is optimistic with renewed vigor to get going.	Politics Reform Cabinet GNU Election
2024 Q1	Oil HCI has exposure to extensive exploration acreage in the Orange Basin, which is emerging as the world's next hydrocarbon giant. Significant oil discoveries have been confirmed and HCI is part of a consortium led by Total commercializing these discoveries. The manager believes earnings from these operations will effectively triple HCI's current earnings in about 5 years.	Orange Basin Total Hydrocarbon Exploration Consortium
	Tourism HCI generates bulk of current earnings from investments in tourism and hospitality, gaming, public transport services, media, coal mining, and properties. The company has a superior track record of compounding through its diversified investment holding structure.	Hospitality Gaming Investment Holdings Compounding
2023 Q4	Value Portfolio trades at 5x PE multiple with 20% earnings yield despite 12% earnings growth and 14% ROE. Manager emphasizes extreme valuation disconnect where high-quality companies trade at historically low multiples due to multiple compression rather than business deterioration.	Valuation Multiple Compression Earnings Yield Discount
	South Africa Focused exclusively on South African small and mid-cap equities. Manager discusses political-economic challenges including electricity outages, failing parastatals, and geopolitical missteps, but views current conditions as creating asymmetric opportunities with upside convexity.	Emerging Markets Political Risk Infrastructure Regulatory
2023 Q3	Value Manager emphasizes extreme value opportunities in South African equities, citing companies trading at 3-4 PE ratios with strong fundamentals. Traditional value formula requires low entry multiples, dividends, buybacks, and organic growth without expecting multiple expansion.	Value Mispricing Multiples Fundamentals Buybacks
	South Africa Manager makes unequivocal call that South African equities are bottoming relative to S&P 500 and Nasdaq-100 within 12-month window. Believes multi-year opportunity exists for SA equities to outperform US indices despite political and economic challenges.	South Africa JSE Emerging Markets Relative Performance Capitulation
2023 Q2	Value Manager emphasizes finding compelling opportunities in inefficient corners of the market, specifically highlighting Argent Industrial as an example of market inefficiency trading at sub-4 PE despite strong fundamentals. Uses Peter Lynch's PEG ratio methodology to identify undervalued companies with strong growth prospects.	Value Market Inefficiency PEG Ratio Undervalued
	Capital Allocation Extensive discussion of Argent's transformation under new strategic shareholder who disposed of low return assets, streamlined working capital, repaid debt, bought back shares, and made earnings-accretive acquisitions. Manager references Will Thorndike's The Outsiders as framework for evaluating capital allocation excellence.	Capital Allocation Buybacks Asset Optimization ROE
	South Africa Fund focuses exclusively on South African listed equities with local presence and knowledge. Manager notes phenomenon of global companies trading at South African discounts, anticipating cyclical turn in capital flows to the region.	South Africa Local Knowledge Discount Valuation
2023 Q1	Education Stadio operates in South African for-profit higher education with compelling supply-demand dynamics. With the ongoing collapse of government-subsidized public universities, fewer than 40% of qualified matriculants can be accommodated in the public system, creating a clear runway for Stadio to more than double its student base from 50,000 to over 100,000.	Higher Education Private Education Student Growth Education Access Campus Expansion

QUARTER

THEMES

Value

The fund follows a value-oriented investment process, seeking companies with superior growth fundamentals and lower valuation multiples. This presents an appealing setup of lower risk thanks to margin of safety and higher prospective returns from the combination of growth and optionality of multiple expansion to fair value.

Value Mispricing Margin of Safety Multiples Undervalued

South Africa

The fund focuses exclusively on South African listed equities, leveraging local on-the-ground presence and knowledge. The manager believes there is a cyclical rotation underway into emerging markets, commodities and value, all of which are positive for the fund.

South Africa JSE Emerging Markets Local Knowledge

Corporate Governance

The iOCO case study demonstrates the importance of governance transformation. Under new leadership, the company implemented governance reforms, overhauled the board, and established proper controls after a history of corruption and poor governance at predecessor EOH.

Governance Management Turnaround Controls

2025 Q4

South Africa

Manager believes South African equities are in early stages of outperformance cycle after bottoming in 2023. Fundamentals have improved materially with better fiscal, economic, and inflation outlook. Liquidity flowing back into SA capital markets with bonds experiencing strong demand and 10-year yield declining from 10.3% to 8.2%.

South Africa JSE Emerging Markets Relative Value

Gold

Large-cap precious metals miners including gold producers drove JSE All Share Index performance with 295% rally during 2025. Gold and platinum group metals together make up roughly 26% of the index and were primary driver of the index's 57% return.

Gold Precious Metals Mining Commodities

Value

Fund focuses on underappreciated and overlooked companies with superior fundamentals and dislocated prices. Portfolio companies continue to grow intrinsic value at better-than-expected rates yet valuations remain depressed. Manager expects combination of earnings growth and valuation normalization to drive returns.

Value Investing Undervalued Fundamentals Intrinsic Value

2025 Q3

Value

Portfolio companies trading at deeply dislocated valuations with strong fundamentals. Acsion trades at 0.3 times book value and 4 times earnings. Argent trades at 6 times earnings or 4 times excluding cash. Lewis trades at 5 times earnings with 11% dividend yield.

Undervalued Discount Cheap Book Value Earnings Multiple

Buybacks

Multiple portfolio companies actively repurchasing shares at attractive valuations. Acsion buying back shares at deep discount with insider accumulation. Argent accelerating share buybacks at value-accretive prices.

Share Repurchase Capital Return Value Accretive Insider Buying

Dividends

Portfolio companies maintaining and paying attractive dividend yields. Lewis offers dividend yield of about 11%. Acsion is paying dividends while maintaining low gearing.

Dividend Yield Income Distribution Cash Flow

2025 Q2

Value

The portfolio contains several names with significant embedded upside trading at deeply depressed valuations. Argent Industrial trades on an ex-cash P/E of below 4× despite strong fundamentals, representing a textbook mispricing of a high-quality, globally diversified, cash-generating company. This is a classic case of a global business trading at South African discounts.

Valuation Mispricing Discount P/E Undervalued

Buybacks

Argent Industrial has repurchased about 43% of its shares at deep discounts over the past nine years. With the company trading on an ex-cash P/E of below 4×, such buybacks are hugely accretive to shareholders. Management has indicated that repurchases will resume after being paused for acquisitions.

Share Repurchases Capital Allocation Accretive Shareholder Returns Management

Dividends

Argent Industrial has reinstated a dividend after several years without one, with cash conversion exceeding 100%. The company expects dividends to grow sustainably from the current base, which should place Argent on the radar of additional market participants.

Dividend Growth Cash Conversion Yield Income Sustainable

Earnings

Argent Industrial's EPS was up 12.5% and has compounded at 30% per annum over the past six years. The manager sees another year of strong EPS growth ahead, driven by organic expansion, disposal of low-return divisions, resumed share buybacks, and full-year inclusion of recent acquisitions.

EPS Growth Compounding Organic Growth Acquisitions Performance

2025 Q1

Education

Stadio operates for-profit higher education in South Africa with strong operating leverage, growing from 8% student growth to 14% revenue growth and 28% EPS increase. The supply-demand dynamics are compelling as fewer than 40% of qualified matriculants can be accommodated in the public system due to government-subsidized university collapse. Stadio has a clear runway to double its student base from 50,000 to over 100,000.

Higher Education Student Growth Private Education South Africa Operating Leverage

2024 Q4

Infrastructure Spending

Massive private sector capex in electricity generation has ended 5+ years of rolling blackouts. Huge waves of private and public sector capex are heading towards infrastructure spend in rail, roads, ports, water and energy with a multiplier effect.

Infrastructure Capex Electricity Rail Ports

South Africa

The political and operating environment in South Africa is improving. There is a strong trend towards privatization of parastatals by stealth as government increasingly partners with private enterprise to address infrastructure deficiencies.

South Africa Political Privatization Government Reform

2024 Q3

Affordable Housing

Calgro is a residential property developer focused on affordable housing in South African metropolitan areas of Gauteng and Cape Town. The company benefits from solid demand due to an affordable housing backlog and improved economic outlook.

Housing Development Residential Affordable Property

2024 Q2

South Africa

Following the election, South Africa formed a Government of National Unity (GNU) representing a shift towards the center and potentially more market-friendly policies. The new Cabinet shows meaningful improvement in key portfolios, with better leadership that should reduce corruption and socialist policy formation. The private sector mood is optimistic with renewed vigor to get going.

Politics Reform Cabinet GNU Election

2024 Q1

Oil

HCI has exposure to extensive exploration acreage in the Orange Basin, which is emerging as the world's next hydrocarbon giant. Significant oil discoveries have been confirmed and HCI is part of a consortium led by Total commercializing these discoveries. The manager believes earnings from these operations will effectively triple HCI's current earnings in about 5 years.

Orange Basin Total Hydrocarbon Exploration Consortium

Tourism

HCI generates bulk of current earnings from investments in tourism and hospitality, gaming, public transport services, media, coal mining, and properties. The company has a superior track record of compounding through its diversified investment holding structure.

Hospitality Gaming Investment Holdings Compounding

2023 Q4

Value

Portfolio trades at 5x PE multiple with 20% earnings yield despite 12% earnings growth and 14% ROE. Manager emphasizes extreme valuation disconnect where high-quality companies trade at historically low multiples due to multiple compression rather than business deterioration.

Valuation Multiple Compression Earnings Yield Discount

South Africa

Focused exclusively on South African small and mid-cap equities. Manager discusses political-economic challenges including electricity outages, failing parastatals, and geopolitical missteps, but views current conditions as creating asymmetric opportunities with upside convexity.

Emerging Markets Political Risk Infrastructure Regulatory

2023 Q3

Value

Manager emphasizes extreme value opportunities in South African equities, citing companies trading at 3-4 PE ratios with strong fundamentals. Traditional value formula requires low entry multiples, dividends, buybacks, and organic growth without expecting multiple expansion.

Value Mispricing Multiples Fundamentals Buybacks

South Africa

Manager makes unequivocal call that South African equities are bottoming relative to S&P 500 and Nasdaq-100 within 12-month window. Believes multi-year opportunity exists for SA equities to outperform US indices despite political and economic challenges.

South Africa JSE Emerging Markets Relative Performance Capitulation

2023 Q2

Value

Manager emphasizes finding compelling opportunities in inefficient corners of the market, specifically highlighting Argent Industrial as an example of market inefficiency trading at sub-4 PE despite strong fundamentals. Uses Peter Lynch's PEG ratio methodology to identify undervalued companies with strong growth prospects.

Value Market Inefficiency PEG Ratio Undervalued

Capital Allocation

Extensive discussion of Argent's transformation under new strategic shareholder who disposed of low return assets, streamlined working capital, repaid debt, bought back shares, and made earnings-accretive acquisitions. Manager references Will Thorndike's The Outsiders as framework for evaluating capital allocation excellence.

Capital Allocation Buybacks Asset Optimization ROE

South Africa

Fund focuses exclusively on South African listed equities with local presence and knowledge. Manager notes phenomenon of global companies trading at South African discounts, anticipating cyclical turn in capital flows to the region.

South Africa Local Knowledge Discount Valuation

2023 Q1

Education

Stadio operates in South African for-profit higher education with compelling supply-demand dynamics. With the ongoing collapse of government-subsidized public universities, fewer than 40% of qualified matriculants can be accommodated in the public system, creating a clear runway for Stadio to more than double its student base from 50,000 to over 100,000.

Higher Education Private Education Student Growth Education Access Campus Expansion

Date	Pitch Type	Author	Ticker	Company	Industry	Sub Industry	Bull / Bear	Exchange	Keywords	Action
Apr 15, 2026	Fund Letters	Desert Lion Capital	-	iOCO	Other	IT Services	Bull	Johannesburg Stock Exchange	capital allocation, Corporate Governance, Emerging markets, Free Cash Flow, IT services, Share Buybacks, South Africa, turnaround, Value	Login
Dec 5, 2025	Fund Letters	Rudi van Niekerk	ACS SJ	Acsion Limited	Real Estate	Real Estate Development	Bull	New York Stock Exchange	buybacks, development, Insiders, Real Estate, valuation	Login
Dec 5, 2025	Fund Letters	Rudi van Niekerk	ART SJ	Argent Industrial Limited	Industrials	Industrial Conglomerates	Bull	New York Stock Exchange	buybacks, capital allocation, cash, conglomerate, Industrials	Login
Dec 5, 2025	Fund Letters	Rudi van Niekerk	ARA SJ	Astoria Investments Limited	Financials	Diversified Financial Services	Bull	New York Stock Exchange	buyback, Delisting, discount, Event-driven, holding company	Login
Dec 5, 2025	Fund Letters	Rudi van Niekerk	LEW SJ	Lewis Group Limited	Consumer Discretionary	Specialty Stores	Bull	New York Stock Exchange	Credit, dividends, Margins, retail, valuation	Login
Jul 23, 2025	Fund Letters	Rudi van Niekerk	ART SJ	Argent Industrial Limited	Materials	Industrial Conglomerates	Bull	Johannesburg Stock Exchange	buybacks, capital allocation, cashflow, Diversification :Contentreference[Oaicite:0]{Index=0}, Industrial, valuation	Login
Jun 30, 2025	Fund Letters	Desert Lion Capital	ART.JO	Argent Industrial	Industrials	Industrial Conglomerates	Bull	Johannesburg Stock Exchange	capital allocation, cash generation, Developed Markets, dividend, industrial conglomerate, mispricing, ROE, Security Barriers, Share Buybacks, South Africa, specialty equipment, Steel fabrication, UK, US, Value	Login
Mar 31, 2025	Fund Letters	Desert Lion Capital	SDO.JO	Stadio Holdings Limited	Consumer Discretionary	Education Services	Bull	Johannesburg Stock Exchange	asset-light, Education Services, Emerging markets, For-Profit Education, growth, Higher Education, operating leverage, Private education, ROE Expansion, South Africa	Login
Mar 31, 2025	Fund Letters	Desert Lion Capital	SDO SJ	Stadio	Consumer Discretionary	Education Services	Bull	JSE	asset-light, cash generation, Education Services, For-Profit Education, growth, Higher Education, operating leverage, South Africa, Structural Tailwinds	Login
Sep 1, 2024	Fund Letters	Desert Lion Capital	CGR.JO	Calgro M3 Holdings Limited	Real Estate	Real Estate Development	Bull	Johannesburg Stock Exchange	affordable housing, Equity, Housing shortage, Management Change, margin expansion, real estate development, Share Buybacks, South Africa, turnaround, Value	Login
Mar 31, 2024	Fund Letters	Desert Lion Capital	HCI.JO	Hosken Consolidated Investments	Financials	Diversified Financial Services	Bull	JSE	Coal Mining, Gaming, Hydrocarbon, Investment Holding Company, media, Oil exploration, Orange Basin, Properties, South Africa, Total Consortium, Tourism, Transport, Value	Login
Mar 31, 2024	Fund Letters	Desert Lion Capital	KRO.JO	Karooooo	Information Technology	Application Software	Bull	JSE	AI, Fleet Management, growth, Long-term compounder, SaaS, Software, South Africa, technology, Vehicle Tracking	Login
Mar 31, 2024	Fund Letters	Desert Lion Capital	ARA.JO	Astoria	Financials	Diversified Financial Services	Bull	JSE	discount to NAV, growth, Hunting, Investment Holding Company, NAV Compounding, Outdoor, retail, South Africa, Value	Login
Jun 30, 2023	Fund Letters	Desert Lion Capital	ART.JO	Argent Industrial	Industrials	Industrial Conglomerates	Bull	Johannesburg Stock Exchange	capital allocation, debt-free, Fuel Storage, industrial conglomerate, international diversification, manufacturing, Mining equipment, Rail Systems, Share Buybacks, South Africa, Steel Trading, turnaround, Value	Login

Date

Pitch Type

Author

Ticker

Company

Industry

Sub Industry

Bull / Bear

Exchange

Keywords

Action

Apr 15, 2026

Fund Letters

Desert Lion Capital

iOCO

Other

IT Services

Bull

Johannesburg Stock Exchange

capital allocation, Corporate Governance, Emerging markets, Free Cash Flow, IT services, Share Buybacks, South Africa, turnaround, Value

Dec 5, 2025

Fund Letters

Rudi van Niekerk

ACS SJ

Acsion Limited

Real Estate

Real Estate Development

Bull

New York Stock Exchange

buybacks, development, Insiders, Real Estate, valuation

Dec 5, 2025

Fund Letters

Rudi van Niekerk

ART SJ

Argent Industrial Limited

Industrials

Industrial Conglomerates

Bull

New York Stock Exchange

buybacks, capital allocation, cash, conglomerate, Industrials

Dec 5, 2025

Fund Letters

Rudi van Niekerk

ARA SJ

Astoria Investments Limited

Financials

Diversified Financial Services

Bull

New York Stock Exchange

buyback, Delisting, discount, Event-driven, holding company

Dec 5, 2025

Fund Letters

Rudi van Niekerk

LEW SJ

Lewis Group Limited

Consumer Discretionary

Specialty Stores

Bull

New York Stock Exchange

Credit, dividends, Margins, retail, valuation

Jul 23, 2025

Fund Letters

Rudi van Niekerk

ART SJ

Argent Industrial Limited

Materials

Industrial Conglomerates

Bull

Johannesburg Stock Exchange

buybacks, capital allocation, cashflow, Diversification :Contentreference[Oaicite:0]{Index=0}, Industrial, valuation

Jun 30, 2025

Fund Letters

Desert Lion Capital

ART.JO

Argent Industrial

Industrials

Industrial Conglomerates

Bull

Johannesburg Stock Exchange

capital allocation, cash generation, Developed Markets, dividend, industrial conglomerate, mispricing, ROE, Security Barriers, Share Buybacks, South Africa, specialty equipment, Steel fabrication, UK, US, Value

Mar 31, 2025

Fund Letters

Desert Lion Capital

SDO.JO

Stadio Holdings Limited

Consumer Discretionary

Education Services

Bull

Johannesburg Stock Exchange

asset-light, Education Services, Emerging markets, For-Profit Education, growth, Higher Education, operating leverage, Private education, ROE Expansion, South Africa

Mar 31, 2025

Fund Letters

Desert Lion Capital

SDO SJ

Stadio

Consumer Discretionary

Education Services

Bull

JSE

asset-light, cash generation, Education Services, For-Profit Education, growth, Higher Education, operating leverage, South Africa, Structural Tailwinds

Sep 1, 2024

Fund Letters

Desert Lion Capital

CGR.JO

Calgro M3 Holdings Limited

Real Estate

Real Estate Development

Bull

Johannesburg Stock Exchange

affordable housing, Equity, Housing shortage, Management Change, margin expansion, real estate development, Share Buybacks, South Africa, turnaround, Value

Mar 31, 2024

Fund Letters

Desert Lion Capital

HCI.JO

Hosken Consolidated Investments

Financials

Diversified Financial Services

Bull

JSE

Coal Mining, Gaming, Hydrocarbon, Investment Holding Company, media, Oil exploration, Orange Basin, Properties, South Africa, Total Consortium, Tourism, Transport, Value

Mar 31, 2024

Fund Letters

Desert Lion Capital

KRO.JO

Karooooo

Information Technology

Application Software

Bull

JSE

AI, Fleet Management, growth, Long-term compounder, SaaS, Software, South Africa, technology, Vehicle Tracking

Mar 31, 2024

Fund Letters

Desert Lion Capital

ARA.JO

Astoria

Financials

Diversified Financial Services

Bull

JSE

discount to NAV, growth, Hunting, Investment Holding Company, NAV Compounding, Outdoor, retail, South Africa, Value

Jun 30, 2023

Fund Letters

Desert Lion Capital

ART.JO

Argent Industrial

Industrials

Industrial Conglomerates

Bull

Johannesburg Stock Exchange

capital allocation, debt-free, Fuel Storage, industrial conglomerate, international diversification, manufacturing, Mining equipment, Rail Systems, Share Buybacks, South Africa, Steel Trading, turnaround, Value

TICKER	COMMENTARY
SOL.JO	The Desert Lion Capital Fund portfolio benefited from our position in Sasol (I wrote about Sasol in our February 2026 letter), while the rest of the stocks in the portfolio held up just fine.
IOC.JO	iOCO is an IT services provider based in South Africa. It was previously known as EOH. Under the stewardship of Rhys Summerton (CEO), Dennis Venter (active shareholder), and Ashona Kooball (CFO), the company rebranded as iOCO in December 2024 and embarked on a new path of value creation and sustainable growth. At around R4.20 per share, iOCO stock is trading at a PE of about 8 times and a FCF yield of about 14%. We expect earnings and FCF to grow at decent double digits for the foreseeable future. Add further earnings per share enhancements from share buybacks and accretive acquisitions, plus the distinct possibility of M&A at group level, and we think the setup is quite compelling.

TICKER

COMMENTARY

SOL.JO

The Desert Lion Capital Fund portfolio benefited from our position in Sasol (I wrote about Sasol in our February 2026 letter), while the rest of the stocks in the portfolio held up just fine.

IOC.JO

iOCO is an IT services provider based in South Africa. It was previously known as EOH. Under the stewardship of Rhys Summerton (CEO), Dennis Venter (active shareholder), and Ashona Kooball (CFO), the company rebranded as iOCO in December 2024 and embarked on a new path of value creation and sustainable growth. At around R4.20 per share, iOCO stock is trading at a PE of about 8 times and a FCF yield of about 14%. We expect earnings and FCF to grow at decent double digits for the foreseeable future. Add further earnings per share enhancements from share buybacks and accretive acquisitions, plus the distinct possibility of M&A at group level, and we think the setup is quite compelling.

Ticker	Put/Call	Amount Bought	Shares Bought	% Change	Weight %
No Recent Buys Data

Ticker

Put/Call

Amount Bought

Shares Bought

% Change

Weight %

No Recent Buys Data

Ticker	Put/Call	Amount Sold	Shares Sold	% Change	Weight %	Status
No Recent Sells Data

Ticker

Put/Call

Amount Sold

Shares Sold

% Change

Weight %

Status

No Recent Sells Data

Industry	Prev Quarter %	Current Quarter %	Change
No industry data available

Industry

Prev Quarter %

Current Quarter %

Change

No industry data available

Investment Summary

Investor Summary

Fund Strategy

FUND PERFORMANCE AS OF 31st March 2026

Investor Letters

Latest Executive Summary:

Executive Summary

Core Thesis

Forward Outlook

Investment Themes

Value

South Africa

Corporate Governance

South Africa

Gold

Value

Value

Buybacks

Dividends

Value

Buybacks

Dividends

Earnings

Education

Infrastructure Spending

South Africa

Affordable Housing

South Africa

Oil

Tourism

Value

South Africa

Value

South Africa

Value

Capital Allocation

South Africa

Education

Investor Pitches

Current Portfolio as of ( 31st March 2026 )

Key Risks identified by Manager:

Key catalysts include:

Portfolio Implications

Ticker Commentary

Rudi van Niekerk Top Holdings

Recent Buys (13F)

Recent Sells (13F)

13F Sector Summary

Portfolio Distribution

Latest 13D & 13G Filings

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Desert Lion Capital