A typical Venture Capital Company (“VCC”) comprises of a portfolio of equity investments, in which capital from investors is used to collectively purchase new shares in other businesses. The LionPride VCC invests in compelling businesses, including mature and disruptive technology companies, and is backed by an experienced board and investment committee.
The LionPride Agility VCC has a single structure with 2 different classes of shares. Investors are able to invest within each individual theme according to their desired risk allocation. The two themes are impact investing (share class B) and emerging technologies (Share class C). The combination of both structures provides a more compelling risk-weighted return on investment profile.
The LionPride VCC aims to achieve the following returns:
- Share Class B: an investment return of 2.5 to 3 times the risk capital invested within 6 years from date of investment.
- Share Class C: an IRR of 35% over a 5-year period.
An investment in the LionPride VCC is considered a long-term investment with a minimum of 5 years to retain the income tax deduction received by the investor.
In our opinion, growth in South Africa will come from SMEs. The Section 12J tax incentive will provide the necessary equity finance needed by these SMEs.
LionPride VCC investors will be entitled to deduct from their taxable income the full amount of their investment in the tax year in which the investment is made. This tax deduction reduces investment risk and enhances the potential for returns (please consult your preferred financial/tax advisor for a tailored solution).
Over the next 5-6 years LionPride VCC intends to return realised investment surpluses to shareholders by way of dividends. Dividends paid will be subject to the normal Dividend Withholding Tax (“DWT”) as applicable. For a better understanding about the offering please contact us to get more information on the Section 12J incentive and how LionPride VCC can help you.
Lionpride VCC is an approved VCC and is a licensed Financial Services Provider (“FSP”) in terms of Financial Advisory and Intermediary Services Act, 2002 (Act No. 37 of 2002) under licence number 49378. LionPride VCC is also registered with SARS as a Venture Capital Company in terms of Section 12J of the Income Tax Act No. 58 of 1962 under reference number VCC-0129. Lionpride Agility Fund has obtained legal opinion that it does not fall within the ambit of the Collective Investment Schemes Control Act no. 45 of 2002.