AltCap is targeting an IRR of 30% over an investor 5 year holding period. AltCap intends on paying a yearly dividend payment of 8% on funds invested.
The below calculation is a million-rand invested for a period of 5 years. The below is based on an IRR of 20%.
AltCap will seek investment stakes in unique SME solutions, products or services. AltCap is not industry specific. Diversification is one of the strategies implemented by AltCap to reduce the inherit risk associated with Venture Capital. These SME’s will be a balance of stable cash flow generating SME’s as well as SME’s focused on capital growth through IP development.
AltCap intends on enhancing returns by partnering with intended investees and providing an advisory function as well as access to our business network.
At AltCap we are looking at generating enhanced returns through focusing on investees who inhibit specific characteristics being
1. High Dividend Yielding Investee
2. Explosive Capital Growth
3. Combination of Dividends and Capital Growth
High dividend paying investees are qualifying companies who have a structured monthly stream of revenue. AltCap will focus on recouping investees returns within two to three years and the enhanced return will be generated in the remaining 2 years.
This does not mean an investment is limited to 5 years, however based on S12J ruling the 5-year period grants the investor the tax incentive.
Explosive capital growth would be companies who are funded merely based on there working concept or proof on concept. By AltCap identifying the potential in an idea we are able to grow the concept into a company and generate the enhanced return by selling our equity stake to an interested party or alternatively employing strategy 1, high dividends.
A combination will be an investee who requires funding either for further development or expansion. AltCap is not only focused on the enhanced returns through dividends but also takes into account the potential for either a buyout option by an investee or open market sale of shares at a premium price.