By JULIE WALKER

PRESTASI founder and chairman Jan Erasmus cannot get used to seeing his company's price-earnings ratio in double figures after so long in the units.

The insurance broking cum financial services group, market capitalisation R241-million, has more than doubled since July to the current 254c. This week, it began what could be an active year by launching the first no-commission unit trust, the Prestasi SA Tracker.

With no entry fee - most funds nail investors for 5% upfront - no exit fee, a statutory fee of 1% and service fee of the same spread over 12 months, no gold shares and only a low exposure to mining, the fund is intended to appeal to the 40% of Prestasi's 130 000 client base who are retired and risk-averse.

It will be managed by Coronation Asset Management and marketed through the national offices of Prestasi Brokers and at the call-centre. Piggybacking on an existing network means lower costs.

Coronation owns 20% of Prestasi, having taken an initial 14% last July in a deal which vastly improved other investors' confidence in Prestasi. Never one to miss a trick, it was Erasmus who approached Coronation about its coming aboard.

"To be a successful listed company, institutional backing is needed. We thought about the usual larger life offices, but I was keen to interest a company on the rise. We are growing from the bottom up and Coronation fitted our focus."

Erasmus exchanged some of his family company Sege's holding in Prestasi for Coronation scrip, and seeks to strike another partnership that will bring clients in from the emerging market.

It is his intention to turn Prestasi into a full financial services company: "The distinction between various financial service providers is becoming blurred and we want to position ourselves as a one-stop shop for insurance, unit trusts and possibly, banking or financing."

Last month's acquisition of insurer Compass was a step on this path. Aegis owned 74% and Sege the balance - Erasmus founded Compass in 1994. Prestasi has bought Compass on an effective five times historic earnings - cheap when compared with the prices paid for the assets of the recently unbundled and de-listed Protea Assurance.

There are two potential scenarios on a broker owning an underwriter. Prestasi could do all its business with Compass, or Compass could lose the business of other brokers. Erasmus says Prestasi deals with six underwriters and Compass has seen only 15% of Prestasi's premiums although this is the bulk of the Compass income. Erasmus says Prestasi will continue to give its clients the best policy.

"I believe that insurance brokers will face a threat from direct writers of insurance business in future, possibly foreign entrants to our market. Compass will continue as a broker-only business and as part of our strategic planning we have positioned ourselves as a kind of haven for that business."