Four words to sum up 40 years of business success
The founder of FirstRand says the group prospered because it constantly diversified
Receiving an honorary doctorate from the University of Pretoria is “a huge honour and very unexpected”, says Dr Laurie Dippenaar, a UP alumni and retired captain of industry who co-founded some of South Africa’s biggest and most successful financial institutions.
Dr Dippenaar, who was awarded an honorary doctorate on 21 April 2023, says his 40-year career as an entrepreneur in financial services can be described in four words: “traditional values, innovative ideas”.
“Of course, it’s an oversimplification, but if you needed to sum up our success in only four words, it would be those four words.”
In the late 1970s, a few years after graduating from UP with an MCom degree and then qualifying as a chartered accountant, Dr Dippenaar and two partners started Rand Consolidated Investments with initial capital of R10 000.
“We went from three people to about 45 000,” he says, referring to FirstRand, which today has total assets of R2 trillion and is the largest financial services group, by market capitalisation, in Africa.
How did they do it?
Start with the basics and grow
“You start with a basic idea that you think will turn out to be profitable. In your first year, you are just trying to survive and then if you are successful with your original idea, you expand it. Ours was an expansion that took 40 years of good strategic decisions.”
The main thrust of these strategic decisions was to constantly diversify the income of the group.
Starting out with project finance for public utility companies and municipalities, Dr Dippenaar and his partners diversified into merchant banking, then life insurance, followed by short-term insurance, health insurance, and so on.
“We kept on diversifying, which made the group more resilient and robust,” he says.
The brands they created or expanded are household names today, including OUTsurance and Discovery. The group also merged with brands such as First National Bank, Rand Merchant Bank, First Rand, Momentum Life and Wesbank.
Dr Dippenaar was chairman of all these companies during his four decades in financial services.
Meanwhile, not content with creating some of the most famous financial institutions in South Africa, he served in the governing bodies of various educational institutions, not least UP, where he served for 24 years, only stepping down about two years ago.
Witnessing the transformation first hand
“I am probably the longest-serving Council member ever,” he says, explaining that every time he decided to call it a day, he was asked to stay on. “Fortunately,” as he puts it, the Minister of Higher Education and Training decreed that the maximum term a university Council member could serve was nine years, and so he was finally able to retire.
“I really enjoyed my time with the Council. The transformation from the time I joined to today is amazing. The Council used to be a collection of pale males from industry. Today, it is diverse in terms of gender, demographics and skills, and of course is a lot larger.”
Dr Dippenaar continues to co-sponsor the Laurie Dippenaar/FirstRand Postgraduate Scholarship, which awards bursaries annually to South Africans for postgraduate studies abroad, in any discipline, at an international university of their choice.
Together with his eldest son, he also looks after the Dippenaar family investments and is as up to date as ever on current financial and economic trends.
A capable state
Youth unemployment is a serious concern, as is South Africa’s grey-listing by the Financial Action Task Force.
“To increase employment, we need economic growth and for the economy to grow, we need a capable state, and for a capable state, we need a meritocracy and a good supply of educated people.”
He says Singapore, which has a civil service based entirely on meritocracy, is a shining example of what can be achieved when government officials are appointed on merit, not loyalty.
On the subject of South Africa’s grey-listing, Dr Dippenaar has this to say: “Our banks were not found wanting. The country was grey listed because the state was not prosecuting financial crimes. The banks would report irregularities, and nothing would come of it. Has anything flowed from Zondo (the inquiry into state capture)? No one has been in court yet for the VBS Bank fraud and collapse. Hopefully, something positive will happen.”
Still, there are some beacons of excellence to look to.
“A qualification from a world-class, prestigious university like UP is highly regarded in the business world, society at large and internationally. An honorary doctorate from UP is a huge honour.”