When you buy Mvela you are buying Tokyo's smile." This is how a rather cynical JSE analyst recently referred to Mvelaphanda Holdings and its chairman, Tokyo Sexwale, during a radio interview.

It's an attitude that is prevalent among investors towards SA's largest empowerment company and the second-largest firm on the listed support services board.

Mvela is first and foremost an investment trust, with little or no sway over the operating performances of its underlying investments. What you are buying into is the promise (or not) that empowerment adds value to these companies and that this will show in Mvela's results, or so the argument goes. How justified is it?

On the same radio programme Mvela CEO Stephen Levenberg jumped to his company's defence: "You're buying a leveraged exposure to SA Inc and to a diversified range of investments, which are all ring-fenced on the downside if something goes wrong. So it's a good exposure to the market in general, and when the market runs the benefits flow through to Mvela."

There is no doubt that the investments the group has made since Mvela merged with Rebserve three years ago have paid off, as is shown in Mvela's 30% profit rise in its most recent financial results. The biggest contribution comes from banking (a 4,5% stake in Absa), but there are also solid investments in construction (10,8% in Group Five) and health care (18,1% in Life Healthcare, formerly Afrox Healthcare). These are all sectors benefiting from the consumer spending boom.

Mining too is experiencing buoyant conditions, to which Mvela is exposed through a 22,9% stake in listed Mvela Resources. But a bid to sell the stake to Incwala - in return for a smaller holding in the new operation and thus, again, a more hands-off investment - failed after Incwala refused to accept some of Mvela's conditions.

The operating part of Mvela is limited mainly to the facilities management division, which accounted for most of the 21% rise in operating profits during the six months to end-December. Thus judging Mvela by anything but its net asset value is a futile exercise. If the JSE still had an investment trust sector, like it used to, that would be a more appropriate home for Mvela.

The same cannot be said for Bidvest. SA's sixth-largest company - and last remaining diversified conglomerate - has consistently offered investors strong returns and a rising share price by actively managing its portfolio of more than 2 500 business units. Over a 10-year period its return on shareholder funds (in US dollars) has been 36%/year, according to a study last year.

It's a strategy that also shows in the income statement after only 17 years of operation. Bidvest turns over more than R77bn (December interim revenue annualised), consistently boosts net income by 20%-plus and has a market cap of R36bn.

With increasing regularity JSE analysts call on Bidvest to buy underperforming companies and sort them out - Merrill Lynch recently listed Bell Equipment and Supergroup. Now that's a reputation worth a lot more than a smile.