Section 12J Venture Capital Company

Pallidus Venture Capital Fund 1 (Pallidus VCC) has been operating since 2016, is a SARS accredited venture capital company (VCC0024) and is currently one of the largest accredited VCC funds in South Africa with more than R645-million assets under management, of which R605-million has been deployed into qualifying companies.

Pallidus VCC was set up in line with the Section 12J tax incentive introduced by SARS in 2009, which aims to incentivise investors to provide equity funding to small and medium enterprises, thereby facilitating economic growth and job creation.

The typical investment size ranges from R10-million to R50-million, other than junior mining, where larger investments of up to R150-million can be made.

Pallidus is a member of the Section 12J Association of South Africa and is represented by Rolandi van der Westhuizen, who is a director on the board of the association.

For more information contact Rolandi van der Westhuizen.

Click here to download the 12J Industry Association Report (July 2020)

12J Industry Association of South Africa 12jassociation.co.za

Private Equity

Pallidus has partnered with Ascension Capital Partners who is perfectly placed to participate in transactions where BEE investment is required.

Ascension Capital Partners is a black owned private equity firm that commenced operations in June 2018, with a unique value proposition and competitive advantage of significant deal flow by virtue of their sophisticated and broad network in addition to the illustrious transaction experience of their founding shareholders and directors.

Ascension is able to source opportunities with potentially superior returns, as well as mandates to raise and structure the financing (whether vendor funded, facilitated or third party capital) to build substantial BEE funds that further the objectives of BBBEE in South Africa as well as establishing a reputable black owned fund manager.

Ascension aims to facilitate sustainable black ownership transactions through the following:

  • Funding BEE transactions with equity versus debt;
  • Maximizing returns for their limited partners whilst furthering the social objective, investing through a black fund manager; and
  • Building of a sustainable and reputable black fund management business.

Ascension Capital Partners is a member of the Southern African Venture Capital and Private Equity Association (SAVCA).

Ascension website

Enterprise and Supplier Development

Pallidus owns 49% of Deliberatus. The company provides thoroughly considered solutions for preferential procurement, enterprise and supplier development.

The BEE scorecards are made up of five elements and a significant portion of the points are allocated to the Enterprise and Supplier Development section of the scorecard (generic codes 36,7% and sector specific codes between 25%-38,5%).

Enterprise and supplier development is a priority element and consists of three sections namely Preferential Procurement, Enterprise Development (ED) and Supplier Development (SD). Points have to be attained in all three elements otherwise an entity may be discounted a level for BEE purposes.

ED and SD, which is a significant portion of the overall enterprise and supplier development section is challenging to obtain on a sustainable basis.

Deliberatus has developed a unique approach which guarantees capital on ED and SD contributions and promotes access to working capital for small enterprises.

For more information contact Louis du Plessis.

Stockbroking

Pallidus owns 50% of A-Trade, a registered broker of 4 Africa Exchange (4AX). A-Trade is an easy-to-use online broking platform that allows retail and institutional investors to invest in securities listed on 4AX.

A-Trade provides its clients with easy account access, mobile share trading and no minimum trading fees for securities listed on 4AX.

A-Trade will soon also expand its service offering to allow its clients to trade in securities listed on other exchanges in South Africa.

A-Trade website