South African investment company, SV Capital, is on a mission to make investing straightforward and accessible to everyone, especially young adults looking to start owning their wealth.
This comes at a time where in recent years, financial markets have experienced increased volatility due to factors like geopolitical tensions, global economic uncertainties, and unexpected events like the Covid-19 pandemic.
SV Capital said as the high cost of living continued to rise, it was becoming ever more difficult to save and put money away. It said that made investing all the more important so that people can make their money work for them.
"The key to successful saving is consistency and discipline. Even starting with small amounts can lead to significant savings over time. As you see your investment grow, it can motivate you to save even more and make it easier to reach larger financial goals in the future."
Launched in 2017 by chartered accountant and financial analyst Ayanda Majola, and wealth management specialist, Kagiso Tloubatla, the company said it was taking a strictly local approach by allowing clients to invest as little as R500 in a herd of cattle.
Majola and Tloubatla said they wanted to make investing accessible to people from various financial backgrounds and help them work towards their financial goals.
It said this was because traditional investments like stocks and bonds were susceptible to global and local events, people everywhere were seeking alternative investments as a way to hedge against inflation and earn higher returns.
According to Delloite's South African Investment Management Outlook: Overcoming structural challenges through deliberate choices published earlier this year, despite growth in the IM sector, there were hard-to-ignore structural challenges that would impact the industry in the years to come. From a macro perspective, the global economic landscape, coupled with the challenging political and economic landscape in South Africa threatened the assets under management (AUM) and flow growth in the industry.
From an individual market participant perspective, IM companies are finding it harder and harder to distinguish themselves in the market amid high levels of competition and perceived homogeneity of products.
Similarly, not all IM companies had invested in data and technology over the past decade to absorb the downward pressures of fees and cost of compliance, according to the outlook.
SV Capital said it knows how important it was to protect clients’ hard-earned money.
"The fund’s track record proves that investments are safe. The company’s portfolio is more than R100 million and over R15 million has been paid out to investors. It is also regulated by the Financial Services Conduct Authority (FSCA) which is mandated to enhance the efficiency and integrity of financial markets."
The firm said that cattle hold cultural and social significance in many communities and were considered important assets that could appreciate in value over time. It said as they grew, they could be used for various purposes, such as meat production and dairy farming. While cattle prices can fluctuate, the demand for cattle products tends to remain relatively stable, as people continue to consume beef and other cattle-related products, it said.
SV Capital said its cattle investment fund has delivered average returns of 14.07% per annum, net of fees, since its launch. It added that what was really smart about cattle investment, was that one simply invests, and the experts took care of the rest. Tloubatla said cattle had long been a symbol of wealth in this country.
“In addition to being a source of food, they also fulfil a variety of socio-cultural roles. Our approach is to provide investment options that are connected to tangible assets-like livestock-that are valued, recognised and understood by our investors, so we can help them create financial security for themselves and their families.”
Majola said allowing individuals to invest with relatively small amounts of money made it easy for them to start. "This is especially important for people who have no experience in investing. By consistently contributing small amounts over time, their investments can grow through the power of compounding, and can lead to significant long-term gains,” Majola said.
She added that as an investor, one could contribute to a collective herd of cattle that would be expertly managed on their partner farmer's feedlot.
“Our primary farmer partner, Beefcor, is one of South Africa's largest and most reputable feedlots. We participate in buying and selling cattle that are kept until they reach the desired weight range, when they are sold to an abattoir at prevailing market prices. The cows are insured so your investment is protected. Once your investment matures, your money plus the profits are paid to your account.”
The firm said that investing in cattle meant participating in South Africa's agricultural sector, with the livestock industry serving as its backbone. Unlike the stock exchange which is driven by sentiment, the demand for beef is consistent and your investment is unlikely to drop significantly in value, as borne out by the returns, it said.
Allied to cattle investment was SV Capital’s iLobola Fund, targeted at individuals who want to save towards customary iLobola, also known as a dowry. A minimum investment of R15 000 was required, over a period of 18 months. It was a simple product that yields attractive returns averaging 16.23%.
Tloubatla said they developed these alternative investment funds to help empower people without overwhelming them. “South Africans from all walks of life deserve to feel comfortable about growing their wealth. With the investment structured to appeal to traditional African concepts of value, it’s a simple, tangible, asset-backed option that delivers inflation-beating returns.”