JOHANNESBURG – Newtown Partners and LionPride Investment Holdings on Friday announced plans to raise R500 million for a co-managed section 12J Technology Investment fund at the 12J Marketplace Conference, in Melrose Arch.
Deven Govender, LionPride chief executive, outlined the fund structure at the conference: “The LionPride Agility VCC Fund is a single technology fund with a choice of two share classes providing the opportunity for a compelling risk-weighted return. The two unique themes to invest in are 1) Impact investing and 2) Emerging technologies”.
This structure enables investors to invest capital into one of two capital pools co-managed by LionPride and Newtown Partners. It also allows investors to gain balanced exposure to early-stage South African technology businesses, or concentrated exposure into a selected theme according to their desired risk allocation.
A major benefit of a section 12J investment fund is that investors can deduct 100 percent of their investment from their taxable incomes in the tax year in which the investments are made. This benefit effectively translates into an investment discount of up to 45 percent of the total investment amount.
“We believe that we’re taking a bold approach that will catapult economic transformation in South Africa. The tax deductible ‘discount’ that a section 12J Fund provides is a great incentive for investors to invest in projects of a developmental nature that can positively impact employment in South Africa,” adds Govender.