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Why the balanced nReach | Capitis Funds are for you:
POSITIVE IMPACT ACHIEVED BY NREACH | CAPITIS FUND
INVESTMENTS
400 jobs createdand sustained
Performance to date: +20% ROI p.a.;
with 10% dividend p.a.
100% of capital received, deployed within 60 days
Total assets under management R400 mil.
22 SME Investments
SA’s most progressive‘ESD’ 12J Fund
• By using your ED & SD spend
• So that you can get a 12J tax break up to 28%
• Through a highly regulated environment
• Giving you maximum BEE points (5 ED and 10 SD)
• Most importantly, turning the spend into a ‘pay-back’ instead
of a ‘pay-away’
• Therefore creating jobs
VCC 0052 | FSP No:47502 | CIRCA 2017 - nReach
VCC 0096 | FSP No: 48600 - Capitis
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The New B-BBEE Codes, requires a Sub-minimum 40% score on 3
elements:
• Ownership
• Skills Development
• Enterprise & Supplier Development
• OWNERSHIP: “A Measured Entity may treat any of its Ownership
arising from a Private Equity Fund as if that Ownership were held
by Black people, where the Private Equity Fund meets specific
criteria” (nReach/Capatis12J & Ingenious Equity)
• ESD SPEND: 5 points ED & 10 points SD of which 3 points
“perpetuate”
• SED: 1 possible “Bonus point” for job creation
It “begins & ends” with a Scorecard...
(December 2019)
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CFOIlse Ferreira
CA (SA)
LEGALLouis Stroebel
COMPLIANCEElzabe Volschenk
INVESTMENT COMMITTEE CHAIRMAN
Geert Doyer CA (SA)
MEMBEREsme Botha
CA(SA)
OPERATIONAL AND FUND MANAGEMENT
ADVISORY AND INVESTMENT COMMITTEE
WE HAVE A TEAM OF PROFESSIONALS
ADVISORY PARTNERS
LLBEmile Raubenheimer
BCom (Hons)Bryan Shanahan
CA(SA)
MEMBERAlwyn Scholtz
MCom LLB
MEMBERMEMBER
CCOKiep Davel
TRP(SA), BS&S(UP)ICMQ (London)
EXECUTIVE CHAIRMANOF THE BOARDWillem Oberholzer Dr Johann
Kritzinger
EXECUTIVE Jennifer Bokwa
LLB
CA (SA)
EXECUTIVE DIRECTOREmceé Nell
CA (SA)
INVESTMENTSTATEGISTFrans Nortje
M.Sc. (Industrial Eng.)
EXECUTIVE Mercy Mukewa
CA (SA)Certified Internal Auditor
EXECUTIVE Renske Mouton
Fiduciary Services Practitioner
EXECUTIVE Rirhandzu Munisi
MA in Finance and Investment
EXECUTIVE Benedict Houlie
BA (Political Science)Financial Analyst Certification
Capitis nReach nReachnReachnReach
nReachnReach
Capitis nReach Ingenious Equity
EXECUTIVE DIRECTOR
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Why you are in good hands. • We are the 1st Balanced/Diversified
section 12J Fund
• We are a highly sought after Category ll FSP
• We have own ‘skin in the game’
• We have a clear exit/liquidity event in mind with every
investment
• We come from a private equity background
• We supply feedback on portfolio performance every 6 months
• We have the highest performance fee hurdle rate based on
‘capital received’ and not ‘capital at risk’
I will definitely recommend nReachONE as they go above and
beyond and are really solution driven to address any and all
possible queries my clients had. They are very knowledgeable and
were always able to answer all questions put to them – they were
extremely well-versed
in all things 12J and managed to explain the complexities of the
12J fund in such a way that even novices understood the
basics!Theuna Erasmus; Illumin8BEE
Our team has proven experience in picking the ‘right jockey and
business’. Collectively we have +30 years experience in private
equity and asset management, we have
done +30 acquisition; +20 liquidity/exit events and +30
structured fund solutions. On aggregate the team has managed more
than R4,5 billion funds under management before.
+30 +20R4,5bnAcquisition
EventsLiquidity/Exit
EventsAUM
+30Structured fund
solutions> R1bn
RR
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Targeted yields
2 times money on Capital Growth10% dividend p.a. on Asset
Rental
3 “Perpetual” B-BBEE points on IFUSL
‘Balanced’ does not mean average returns.
South Africa’s 1stBalanced 12J VCC fund
RecommendedAsset Allocation
Fund performance is calculated as: ‘after fees, but before
taxes’
• The ESD spend is divided between Capital Growth and Asset
Rental @ 40% and
20% is allocated as an Interest Free Unsecured Loan
• This balanced approach increases the probability of real
returns
• This balanced approach has yielded 10% per annum dividend on
the asset retal portion
• The capital growth exceeds peers and best performing
conventional equity investments
• The 20% “Interest Free Unsecured Loan” results in 70% score
recognition. A once-off
Increase of the 20% Rand amount up to 100% recognition;
resulting in 3 “perpetual”
B-BBEE points.
• This asset allocation does not mean average returns, partly
due to the tax boost and
quality of investment
Capital Growth
40%
Fixed Income/
Asset Rental40%
• Share subscription transaction on balance sheet• 1% of PAT for
5 ED points• 2% of PAT for 10 SD points (including 3 perpetual
points)• 28% tax deduction• Minimum five year investment
CorporateBEE spender
“QC” = Qualifying company / QSE
QC 1 QC 2
The salient Investment Structure properties
• Share subscription transaction• < R50 million revenue• ED
and SD must be deployed in separate QCs
• Empowered 12J / VCC fund
“Converting a ‘pay-away’ into a ‘pay-back’
51% Black owned Fund Manager
IFUSL*20%
*Interest Free Unsecured Loan
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Quick Fact Sheet
Capital Growth Comparison Fixed Income Comparison
Distribution of Asset Classes Distribution of Investment
Sectors
29%
41%
31%
Property backed assets
Asset Rental
Unlisted Going-Concerns
Hotel and Tourism
Student accommodation
Agriculture
Disruptive tech
Utilities
Solar
Health
Waste benefication
Waste recycling
Building materials
Restaurants
21%
9%
28%
7%
3%
8%
2%14%
2%
Distribution of Portfolio Revenue Generation
45%55%
Business to Business (B2B) Business to Consumer (B2C)
Distribution of Impact Themes
Going green
Health and leisure
Education
Technological advances
Food44%
11%9%
13%
23%
0% 5% 10% 15% 20%
Jan 19
Jan 18
Morningstar peer average 5 years yield (medium
equity)Morningstar #1 fund 5 year yield (medium equity)nReach |
Capitis 5 year projected yield (capital at risk)
0
3
6
9
12
15
Hollard
Discovery
nReach | Capitis annualised dividendsMorningstar peer average
income fund
Morningstar #1 Income FundMorningstar SA CPA (headline)
3%
1%
Jan 19Jan 18
Jan 20 Kagiso
Jan 20
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Capital Growth
50%
Fixed Income/
Asset Rental50%
Our combined qualifying company portfolio
Utilities
Health
Hotel and Tourism
Education
Agriculture
Restaurant and Hospitality
Solar
Wastebeneficiation
Wastebeneficiation
A national boutique hotel group and property
manager
Various national student accommodation
properties
Rental of various types of livestock
A multi-franchisecoffee bistro
Rental of electricity,water and gas smart
meters
Solar electricity generation and retail sales
A low cost cardiothoratic surgery
practice
A builder and operator of various technologies
Recycling of mining waste into aggregates
Company Sector Business model
Asset class Impact
Technological Advances
Education
Food
Health and Leisure
Green
Green
Green
Food
Health and Leisure
Lodge for leisure
Food
Hotel and Tourism
Restaurant and Hospitality
A multi-franchisesit-down restaurant chain
Technological Advances
Blockchain Technology that underpins digital transactions
Health and Leisure
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“As far as I know my 10% dividend per annum, paid pro-rata every
4 months, appears the highest and most frequent in the
industry”
Dieter Laubuscagne; Business owner
Health
Food franchises
Buildingmaterials
Agriculture
Media
Agriculture
Waste recycling
Solar
Manufacturing and wholesale of flooring
solutions
Grain farming and storage
Digital marketing
Farming of bees and honey
Clinics for TB and Aids patients on employer
sites
A multi-franchisesit-down restaurant
chain
A large national onsite waste recycler
A manufacturer of solar equipment
Company Sector Business model
Asset class Impact
Our combined qualifying company portfolio
Health and Leisure
Technological Advances
Green
Green
Technological Advances
Food
Food
Food
Our high impact, uncorrelated investment themes and investments
already made and in progess
Capital Growth
50%
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“We have found nReach | Capitis’s insight and information
extremely helpful. It has enabled us to build product solutions
beyond our initial requirements and reason for our contact. We look
forward to a long and successful partnership,
exploring, developing and successfully concluding many deals of
mutual benefit.”Andreas Wagner
ANH Technologies (Pty) Ltd
Why ‘S12J’ is for you
What you need to know about ‘S12J’
As at the end of August 2019, SARS presented +/-R8 BILLION worth
of ‘tax relief’ for South African tax payers.Now is YOUR
opportunity to participate in the next tax year’s Section 12J
relief - already worth BILLIONS.
• Section 12J of the Income Tax Act stipulates that taxpayers
who invest in qualifying Section 12J companies can
write off 100% of their investment against taxable income in the
year they invest
• Designed to stimulate SA economy and create jobs
• Investors benefit up to 28% immediate tax relief, which
reduces the cost of the investment, provides downside
protection and enhances overall returns
• Minimum Investment period 5 years
• Minimum Investment amount R250 000
• The sunset clause is June 2021
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• Any taxpayer qualifies to invest• Claims tax deductions in
respect of expenditure incurred to acquire shares in approved 12J•
Individuals & Trusts will only be allowed to invest R2.5
million while corporate investors may invest R5 million in any
single tax year• An investor cannot be a “Connected person” to the
VCC (no single investor can hold more than 20% equity in the VCC)•
No investor can have more than 20% equity in a specific share
class• Standard income tax and CGT rules apply in respect of VCC
shares • Minimum investment period is 5 years to avoid
recoupment
Main Rules and Regulations of 12J Funds
MAIN RULES FOR THE �INVESTOR
MAIN RULES FOR THE �12J VCC
MAIN RULES FOR THE 12J QUALIFYING COMPANIES
• Registered with SARS and FSCA • After the expiry of 48 months
from the first date of issue of VCC Shares, the 12J company must
satisfy the following requirements by the end of each year of
assessment : • A minimum of 80% of the expenditure incurred by the
VCC must be for shares • Each investee company must, immediately
after the issuing of shares, hold assets with a book value not
exceeding: * R500 million in any junior mining company; or * R50
million in any other qualifying company• No single investment in
any one qualifying company must not exceed 20% of funds under
management• The VCC cannot acquire more than 69% of the shares in
any one qualifying company
• NOT Necessarily start-up’s, can be a going-concern• The
Investee must be a company• The company must be a resident• The
company must not be a controlled group company in relation to a
group of companies of which the 12J VCC forms part• The company’s
tax affairs must be in order• The company must be an unlisted
company. A junior mining company may be listed on the Alternative
Exchange Division (AltX) of the JSE Limited• During any year of
assessment, the sum of the “Investment Income” derived by the
company must not exceed 20% of its gross income for that year of
assessment• The company must not carry on any of the following
IMPERMISSIBLE TRADES: • Immoveable property, except trade as a
hotel keeper & student accommodation • Financial services such
as banking, insurance & money-lending • Advisory services,
including legal, tax advisory, stock broking, management
consulting, auditing, or accounting • Operating casino’s or other
gambling related activities • Manufacturing, buying or selling
liquor, tobacco products or arms or ammunition; or • Any trade
carried on mainly outside the Republic
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nReach | Capitis costs vs competitors
Upfront raising fee
Annual management fee
Performance fee hurdle rate
Performance fee (only at exit)
3%
3% on capital investment
6% IRR on capital investment
30% of gain above hurdle rate
no other 12J has this offering
nReachone | Capitis 12J Other 12J’s
DISCLOSUREAll information and opinions provided are of a general
nature and are not intended to address the circumstances of any
particular individual or entity. We are not acting and do not
purport to act in any way as an advisor or in a fiduciary capacity.
No one should act upon such information or opinion without
appropriate professional advice after a thorough examination of a
particular situation. Any representation or opinion is provided for
information purposes only. The views, opinions, recommendations and
articles are thoroughly researched but we disclaim all liability
for any inaccuracies or omissions found or for losses made. We
endeavour to provide accurate and timely information but make no
representation or warranty, express or implied, with respect to the
correctness, accuracy or completeness of the information and
opinions. We do not undertake to update, modify or amend the
information on a frequent basis or to advise any person if such
information subsequently becomes inaccurate. No guarantee is given
as to the accuracy, completeness or reasonableness thereof, it
being understood that we are not your financial adviser or
fiduciary. You are cautioned to ensure that you have made an
independent decision in accordance with your own objectives,
experience, operational and financial resources and any other
appropriate factors including independent professional advice.
Remember: Never invest more than you can afford to spare. The value
of any investment and the income derived from it can go down as
well as up.
no other 12J has this offering
no other 12J has this offering
no other 12J has this offering
Christoff (Kiep) DavelEmail: [email protected]
nReach One (Pty) Ltd | Registration No. 2016/316020/07 |
Directors: Dr J Kritzinger | C Oosthuizen | G Pienaar | C Davel
Tel: +27 (0) 12 346 6333 | Fax: +27 (0)86 630 5156
Unit 8, Waterkloof Forum, 374 Milner Street, Waterkloof
Pretoria, 0081
FSP: 47502 | VCC-0052
Capitis Equities (Pty) Ltd | Reg No: 2017/251942/07 | Directors:
Emceé Nell | Willem Oberholzer
Tel: 087 822 1095
169 Delmondo Office Park, Garsfontein Drive, Ashlea Gardens,
0081
FSP No: 48600 | VCC-0096
Consultus Capital (Pty) Ltd | Reg No: 2019/561709/07 |
Directors: R Munisi | B Houlie
138 West street, Sandton, 2031
The beginning of a partnership
Johan KritzingerEmail: [email protected]
Benedict HoulieEmail: [email protected]
Rirhandsu MunisiEmail: [email protected]
