AltCap post investment plan is to mitigate risk through building and maintaining a solid transparent relationship with our investees. AltCap will become actively involved in each company we invest in making sure that the maximum value is unlocked.
AltCap will attend monthly meetings with all investees to confirm that the company is still following their intended strategy. AltCap will offer advice where need be, however we are investing in the entrepreneur as much as the business concept, we do not want to run their company we want to be an active partner.
AltCap will not achieve its targeted return
As with any investment, the possibility of not achieving the targeted return is an inherit risk. However, this risk is mitigated through the upfront tax deduction provided by investing in a 12J registered company. Meaning, up to 45% can be used to offset any downside or a lower than expected return.
AltCap has already done a deep due diligence into all the companies we are considering investing into. Profitability is key and with any investment we look at recouping your initial investment within three years or sooner and then growing the capital into and enhanced return.
The investor may risk losing part of their capital
As with any investment, an investors capital is by no mean guaranteed, as with any investment. AltCap, however, puts in place a number of risk mitigating mechanisms to minimise losses.
In case of liquidation of any investee, AltCap is entitled to receive any cash from sale of assets before any other stakeholders.
Altcap’s focus is on a diverse range of companies with different payment structures to hedge the risk against possible default.
- AltCap Ordinary shares are illiquid investments, and investors should expect this to be a medium to long term investment strategy.
- The investor may be subject to income tax risk
Any amount invested by purchase of ordinary shares in AltCap becomes immediately tax deductible. This deduction is claimable on the date the investor makes the investment. If the investment into AltCap is held for a period of 5 years minimum, the initial tax saving granted to the investor remains intact. If, however the investor wishes to dispose of their AltCap ordinary shares prior to the 5-year term, the original tax savings will be recouped and added onto their taxable income.
Investors will be subject to capital gains tax as well as dividends withholding tax (where applicable) for any proceeds from realizing their investment in ordinary shares and dividends received respectively.
- Investors capital under-performing in real terms
A major concern on the minds of most investors is socio-economic volatility. AltCap is focusing on investees that are uncorrelated to the South African socio-political volatility.
AltCap intends on investing in qualifying companies who have contractual contracts in place with their customer base. This allows AltCap to predict future revenue streams as well as implement contingency plans if revenue targets are not met.
AltCap being an unlisted investment will often be subject to risks not foreseen by the AltCap team as well as the Board. In reviewing this document, potential investors should take note of other possible risks that could be of importance. We advise any investor to consult with their investment advisor before deciding whether to invest into AltCap.