Section 12J Funds

Jaltech’s services

Jaltech has developed a niche in the South African market in assisting companies, family offices and high net-worth individuals with forming Section 12J Venture Capital Companies (VCC) as well as managing all aspects of the VCC.

One of the most recent VCCs formed by Jaltech, in partnership with a listed South African construction and mining contract company (Stefanutti Stocks Holdings Limited), is The JSS Empowerment Mining Fund www.jssminingfund.co.za.

Where a client is interested in forming a VCC, Jaltech can offer the client every aspect of the VCC formation and management services. This service offering (in part or in whole) includes the following:

VCC structuring

Ensuring the VCC is structured to achieve the client’s objectives whilst at the same time maximising tax efficiency for the client and potential investors into the VCC.

VCC formation

In parallel to the VCC structuring service, Jaltech will undertake the necessary VCC formation services, these services include (amongst other services):

  • preparing and submitting a VCC application to the Financial Services Board and the South African Revenue Service for the registration of the VCC
  • ensuring the VCC has the necessary licensing, governance structures and regulatory requirements

Facilitating legal agreements for the VCC

Jaltech has developed with leading law firm Edward Nathan Sonnenbergs Inc. the necessary legal agreements in order to form the VCC. These agreements include (among others):

  • memorandum of incorporation
  • shareholder’s agreements
  • private placement memorandum
  • lease agreement
  • sale agreements

VCC administration

Once the VCC has been registered and all the legal agreements have been finalised, Jaltech shall undertake an extensive VCC administration role, these services include but are not limited to the following:

  • appointing and maintaining the required key individual for the Financial Services Board’s purposes
  • managing the VCC in accordance with the Financial Services Board’s requirements
  • liaising with the compliance officer of the VCC on a regular basis
  • preparation of monthly management accounts in respect of the VCC
  • liaising with the VCC’s auditors and providing them with such information as they may require for the purpose of preparing the VCC’s annual financial statements
  • procuring the issue, management and delivery of share and tax certificates to the shareholders of the VCC
  • providing the necessary reports on behalf of the VCC to the South African Revenue Services and the Financial Services Board
  • preparing and submitting PAYE, VAT and all other statutory returns required in respect of the VCC
  • Reporting to investors

Investment screening services

Once the VCC is established and has potential investment opportunities, Jaltech will screen these opportunities. This service includes:

  • structuring the potential investments in line with the VCC’s requirements
  • assessing the financial viability of such investments which will include, developing financial models for the potential investments
  • understanding the likelihood of the investments achieving the return on investment required by the VCC’s investors
  • if required, Jaltech can also assist with identifying investment opportunities

Fund raising services

In circumstances where a client intends forming a VCC for the purposes of raising external finance to fund projects, ventures or existing businesses, Jaltech has the experience and capabilities to assist.

During the fund raising process, Jaltech shall assist the VCC through every step of the process, this includes preparing the private placement memorandum (PPM), which is presented to potential investors. The PPM will include all the relevant information necessary for investors to consider investing into the VCC. The PPM will including (amongst other things), the:

  • rationale behind the VCC
  • background of the client and its role in the project
  • proposed business model and operational structure
  • detailed financial projections and financial statements of the underlying projects
  • expected returns and benefits (including tax benefits) for investors
  • funding requirement and structure
  • risk analysis and risk mitigations
  • scenario testing and sensitivity analysis

In addition to the services reflected above, Jaltech has extensive experience and expertise in setting up independent processes, policies and committees necessary for raising finance in the VCC sector, these services include:

  • selecting investment committee and board members
  • developing mandate policies
  • developing the investment application process
  • developing the necessary website and other marketing material
  • coordinating with PR agents, if necessary
Ground Floor, Marlborough Gate, Hyde Park lane, Hyde Lane, Hyde Park, Sandton
Gaurav Nair  |  Director mob: (+27) 72 786 1455 email: gaurav@jaltech.co.za
Derrick Hyde  |  Director mob: (+27) 73 152 7536 email: derrick@jaltech.co.za
Jonty Sacks  |  Director mob: (+27) 82 708 0596 email: jonty@jaltech.co.za

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