Sebvest 12J Value Proposition and Risk Management
Sebvest 12J attention to detail, hands on approach and grass root level involvement gives it a strong competitive advantage over other 12J funds. A strong team of professionals and a board comprising CA (SA)’s, MBA’s and Doctors with expertise in M&A, Audit, Investment and Risk coupled with strong track records of success means the fund is poised for high returns at low risk. Together with the team and track record of success, Sebvest 12J has a large competitive advantage over the market through it’s holistic approach and value add services by being part of a comprehensive financial group. We not only have a strong due diligence process with strict hurdles and market lever achievements pre investment but have a hands on approach at grass root levels post investment. Each investment made by Sebvest 12J is contracted to Sebvest Financial services that takes control of the financial and managerial functions of business ensuring that the business is run optimally.
Each business will receive a Sebvest 12J member on the management board which ensures that the business growth strategy is planned and implemented with accuracy. Businesses can rise and fall on its working capital management and with Sebvest Treasury the investment business is ensured that this function of the company is always looked after. As a Black Owned 12J fund all investments count to BEE points which gives the fund an additional value add proposition not only for the investor but the businesses it invests into. This allows Sebvest 12J to find investment opportunities at below value by supplementing it with the benefit of BEE.
Sebvest 12J stands head and shoulders above other 12J funds due to its holistic approach as well its ability to manage risk through track record, a strong management team and its strict pre and post investment processes.
The VCC regime and Section 12J
One of the main challenges faced by small and medium-sized businesses and junior mining companies is access to equity finance. To assist with access to equity finance and to stimulate SMME growth in the country, the government and SARS implemented a tax incentive, known as Section 12J, for any investors who invest into Venture Capital Companies (VCC’s) or 12J companies, through the VCC regime. These investors would benefit in the form of a tax deduction in respect to expenditure incurred to acquire shares in approved VCCs (12J Funds).
The Sebvest 12J fund is built on the following are cornerstones, making it sound in principle:
Currently, there are various section 12J funds in the market who look to specific investment types or projects, however, their reasons for doing so are not focused enough on the true cause, which is the growth of young businesses.
Sebvest 12J, a substantial fund at the forefront of the investment market, sets the bar for investment returns, mergers and acquisitions and SMME growth. It is a proudly South African fund that is one of the first Black Owned 12J funds in the market. Sebvest 12J is synonymous with integrity, professionalism and authenticity that not only returns growth and ROI to shareholders but contributes to the socioeconomic standing of our country by radically growing the SMME market.
Sebvest 12J vision for 2021
Sebvest 12J strives to be the largest S12J fund in the country investing in multisector, multifaceted growth businesses, delivering the highest SMME growth while also being the leader and innovator that other platforms measure themselves against. It’s proven track record will tell the story of successful SSME growth and job creation in South Africa, a positive return for both shareholders, and the greater South Africa.
The Sebvest 12J fund is a robust and attractive venture capital company producing strong returns in addition to the tax break received in using the structure.
The investment mandate is the story a fund tells in the investments it makes. It forms the blueprint of how its vision will be achieved.
Sebvest 12J has the vision of being the benchmark in small to mid cap investment and has a mission to transform the country by creating jobs through growing businesses in South Africa. What makes Sebvest 12J different to others of its kind is that we don’t only focus on large and strong ROI’s off limited risk but also on socioeconomic growth through growing the SMME sector.
Our mandate is to build a portfolio of investments within SMME companies that are asset based with high growth or income potential. This mandate will be enforced with robust and detailed due diligence as well as sustained mentoring and management post investment.
The fund structure details how the mandate is going to be achieved through putting in place parameters to which the management company implements the mandate. Sebvest Capital Partners have built an innovative fund that investors will find attractive and which allows them to tailor make their investment solution for themselves. The Sebvest 12J fund is structured through three different ordinary share classes:
Although each share follows the investment mandate of asset based SMME businesses with high growth or income potential, they do it carrying different risk profiles and up-side potentials. Each investor will be able to determine which class he would like to participate in and the funds raised via each class is ring fenced for that specific type of investment. Sebvest 12J success, returning above market ROI’s, has been due to its managing of risk pre and post investment.
THE INCOME SHARE
Investment return instrument ……………. Dividends
Investment return hurdle ………………….. 15% PAT
R 1 million 5 year return at hurdle ………. R 1,747,971
The Income share class funds will be used to find investment opportunities that deliver high income producing potential and large dividend payments regularly. It will be cash driven businesses that can grow organically through scale such as;
THE STABLE SHARE
Investment return instrument ………. Capital Growth / Dividends
Investment return hurdle ……………… 12% equity growth + 7% PAT
R 1mil 5 year return at hurdle …………. R 2,081,620
The stable share class is for investment into companies that are looking for growth capital gained through a stable financial track record and that which carry a strong management foundation. These are companies that require capacity to match demand or increased asset base to attract further business such as;
THE GROWTH SHARE
Investment return instrument ……… Capital Growth / Dividends
Investment return hurdle ……………. 18% equity growth + 10% PAT
R 1mil 5 year return at hurdle ………. R 3,019,885
The growth share class is for investment into companies that carry more risk but higher up-side potential through innovation or first entrants. This share class will also be used for project-type investments that have a clear entry and short-term exit strategy such as:
THE ECONOMIC DEVELOPMENT SHARE
The Sebvest 12J fund has set aside a specific share targeting 100% black owned businesses. These funds will be used, to start, fund and grow black entrepreneurs from new entrants to fully established businesses. This share class is an exciting prospect for corporate companies as 100% of your investment is tax deductible and 70% of any investment into the Sebvest 12J fund counts towards your mandated ED spend.
THE STRUCTURE SHARE
Sebvest 12J has included a percentage of it’s authorized share for the use of investments into specific projects you as a client might have. This is an exciting share for companies or individuals that have investment projects in their pipeline and would like to take advantage of expert financial and tax structuring for them.
The governance of a fund is crucial to its success. The fund must be managed to a strict ethos of professionalism and integrity to ensure that trust is developed between investors and investees alike. This trust translates into confidence and the ability to grow together. Sebvest Capital Partners prides itself in the strong management team and board it comprises of. This strength aids in building an ethical and driven culture and ethos in the company. Furthermore, Sebvest Capital Partners takes accountability very seriously, which is just as important from a statutory and regulatory stand point.
To meet all statutory and regulatory requirements and to hold Sebvest Capital Partners and it’s management team accountable, the following audit, legal and compliance officers have been selected:
