Fund Investment Process

Investment companies and projects will be assessed according to their observance of the Gauteng Growth and Development Strategy, BBBEE policy, employment creation, poverty alleviation, generating minimum investor returns and promoting economic development.

Companies will be required to submit business plans to the fund. Should these business plans be identified to have matched specific investment criteria, the fund manager will compile a report of the investment opportunity detailing the portfolio company, the potential investment, the risks involved and a recommendation to pursue the investment or not to. This report will be submitted to the Management team for further scrutiny. Should the Management team endorse the potential investment, further investigation of the portfolio company’s financials is undertaken by the manager to ensure maximum investment and minimum risk.

In the event of the company meeting the stringent investment criteria it is furnished with an conditional offer subject to the approval of the investment committee and subject to amendment following a due diligence procedure.

The due diligence process is carried out to ensure that the manager has supplied the fund with a clear overview of the investment, its growth potential and the risks involved in pursuing the investment. A commercial due diligence entails a detailed investigation of the industry, the company and its competitive edge and its capacity to handle foreseeable threats and prospects. The company will also undergo an accounting due diligence to investigate the accuracy if its financial statements and a legal due diligence to inspect its legal processes and documentation.

The outcomes of these investigations are submitted to the investment committee in the form of an information memorandum for review. Pending the committee’s approval, that manager presents the portfolio company with proposed deal conditions. If and when the portfolio company and the fund reach consensus on the investment, a notice is circulated by the fund to its investors informing them of their investment dividends.
The portfolio company will be closely monitored throughout its implementation of the investment by the fund and its manager.

After an eight to ten year period the fund will begin exiting its investments in order to gain a return. Alternative exit strategies will be assessed according to timing, economic and tax factors to maximize returns on investments.