TAX AND INVESTMENTS
First 12J megafund set to lift start-ups
SA’s private equity and venture capital industries look set for a boost with the launch on Thursday of the country’s first 12J portfolio of funds. Metta Capital, driven by Grovest and Venture Capital Management Services founders Jeff Miller and Malcolm Segal, heralds the introduction of the first 12J fund of funds. Section 12J was introduced as a rebate in the Income Tax Act in 2009 to encourage investment in young businesses. Investors in approved 12J companies can claim 100% of their investment as a tax rebate, provided they hold it for longer than five years. Metta Capital brings together eight 12J funds across the logistics, mining, hospitality, retail, energy and telecommunications sectors. The portfolio, which has a minimum investment of R500,000, targets an internal rate of return net of fees and taxes of 16% over six years, with a dividend yield of 5% to 8% per annum from 2019. Segal estimates that investments into 12J companies could exceed R3bn in 2018. Metta Capital, whic...
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