Impaktfund

Investment mandate

The Impakt Fund will invest in a diversified portfolio of companies that will help realise the vision of The Impakt Fund and each Share Class. These companies will be Qualifying Companies in accordance with Section 12J of the South African Income Tax Act. 

The Impakt Fund will acquire no more than 69.9% of the equity in a Qualifying Company to ensure that the current management team stay interested and committed to the success of the investee.  

Investments will be carefully selected from a pipeline of promising opportunities

The following characteristics will be typical of investments considered: 

A management team that believes in the investee’s vision and that has the required skills to run the company

Revenue positive with a growth forecast

Strategic positioning of the solution (heavily weighted)

Solution(s) that have the potential to scale

Providing a solution that is relevant, demonstrated by measurements such as market share

Investment selection process

 The diagram below provides an overview of the investment screening and selection process which The Impakt Fund intends to follow. The diagram is followed by a brief explanation of each stage in the process. The Board is responsible for all investment decisions.

Step 1

Identify
Identify the Fund Manager, through its relationship with the Grovation Group and its partners as well as from other potential sources, will actively seek, identify and select investments that are in line with The Impakt Fund’s mandate and investment criteria.

Step 2

Research
Research initial due diligence to better understand each opportunity will be carried out by the Fund Manager. Due diligence generally includes research and consulting with advisers/experts about the specific opportunity, and building and enhancing preliminary financial models using initial projections to understand the potential returns of investing. The promoters of the opportunity are usually engaged and are required to present an overview of the project, which will typically conclude with a question and answer session.

Step 3

Initial presentation
After undertaking preliminary research, reviewing initial presentations and having initial discussions, a brief investment proposal will be prepared and presented to the relevant Share Class’ Advisory Committee. After this presentation, permission to submit a first offer (non-binding) and/or a budget to spend a specified amount of money on a consultant or other deal-related expenses will be obtained from the Board. If approved, the investment would proceed into the next stages of the process.

Step 4

Letter of intent
A non-binding letter of intent (LOI) will be prepared to indicate The Impakt Fund’s interest in pursuing the investment further. The LOI will detail a proposed investment, capital structure post-investment, key assumptions made, key due diligence areas, approximate timing needed to submit a binding offer for investment and the necessary authorisations and approvals required by Impakt Fund’s Board to complete the transactions.

Step 5

Further due diligence
The investment promoters will begin providing more detailed confidential information in what is typically referred to as a virtual data room. A review of all the relevant data room files will commence, and the investment promoters will be engaged with more specific, detailed questions. Critical issues that may require third-party consultants’/experts’ opinions will be discussed.

Step 6

Financial modelling & forcasting
After detailed discussions with the investment promoters on all of the main drivers behind the investment, a financial model will be built for the investment. The financial model is generally a very detailed revenue and cost breakdown based on specific drivers and assumptions (e.g. price, volume, input costs, customers/clients, fixed vs variable cost structure, etc.). All these breakdowns combine into one model to describe the expected financial performance of the project with a significant level of detail.

Step 7

Preliminary investment memorandum
Once a more detailed financial model has been developed, a comprehensive investment thesis (reason for investing) and strategy (plan to carry out the investment thesis) is completed. A preliminary investment memorandum (PIM) is compiled to summarise the investment opportunity to the Board. Provided that the PIM has been accepted by the Board, final due diligence will be performed to provide binding terms of funding for the investment.

Step 8

Board approval
Once all due diligence items are completed a Final Investment Memorandum (FIM) is drafted. A FIM is essentially the equivalent of a PIM that also includes further due diligence and specifically addresses the key issues introduced by the Board after it reviews the PIM. The Board will either reject or approve investment.

Step 9

Invest
At this stage, a final binding offer for investment will be made. All relevant legal agreements will be signed. Once the conditions precedent are fulfilled, funds will be released.

How to apply

Prospective investors who wish to subscribe for Shares under this Offer can do so by contacting Sarel Visser of The Impakt Fund.

Postal address: Unit 19 |  1 Melrose Blvd  |  Birnam | Johannesburg | South Africa | 2076

Office number: +27 11 880 0950

Email address: invest@impaktfund.com or sarel@impaktfund.com

A Client Pack consisting of the following documents will be provided to a prospective investor:

  • Client Agreement
  • Disclosure Notice
  • Subscription Form

A registered representative of The Impakt Fund will be made available to assist prospective investors in completing the relevant documents contained in the Client Pack.

Should a prospective investor wish to complete the Client Pack without the assistance of The Impakt Fund, a Disclosure Notice must be completed.

Completed Client Pack documents may be submitted to impact@impaktfund.com.

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