Buried in Brait’s annual financial statements released at the end of June was the news that it has cut the annual advisory fee paid to The Rohatyn Group to just R50 million from this year.
In year one , Brait would pay Ethos R100 million for managing its portfolio. This would be adjusted with inflation each year of the three-year contract. Various incentives based on performance were included in the contract. During that year , Ethos actually voluntarily reduced it to R91 million in response to the Covid-19 pandemic.
It will likely sell down the remainder of its Premier stake over time but says it needs to “buy time to benefit from the profit and value growth” in that business.And it will “most likely” exit Virgin Active via a listing, but this will only be in 2026/2027 once the operator has “fully recovered” from the pandemic.To get out of this tricky situation, it will unbundle its stake in Brait to shareholders, leaving them with the problem.