BLUECHIPINVESTMENT |
BLUECHIPINVESTMENT | Responsible investmentImpact and returns: why financialplanners should consider ACOFThe narrative that impact comes at the cost of returns simply is not true.Financial planners are often faced with a key challengewhen advising clients: balancing the desire for strongfinancial returns with the growing demand for investmentsthat drive positive social and economic impact. Theperception that impact comes at the cost of returns, or viceversa, has historically kept investors from seizing opportunitiesthat could achieve both. The Altvest Credit OpportunitiesFund (ACOF) is one such example. ACOF delivers private creditreturns that are competitive andcontribute to economicdevelopment by funding South African SMEs. With equityinvestors earning an internal rate of return (IRR) of almost26% per annum for a seven-year period, and debt providersearning Prime +2%, ACOF offers a compelling investment casethat aligns financial growth with meaningful impact.South Africa faces a staggering SME funding shortfall,estimated at over R500-billion. Traditional banks often viewSMEs as risky, and businesses are pushed towards expensivenon-bank financial institutions (NBFIs) that charge predatoryrates – sometimes exceeding 100% annually. This leaves manySMEs in a financing trap.Private creditACOF provides structured, secured loans to high-potentialSMEs. These businesses represent the backbone of SouthAfrica’s economy, yet they struggle to access funding. Thefund bridges this gap while ensuring investors benefit froma well-managed portfolio of diversified loans, supported bystrong risk management protocols and collateralised lendingstructures. Private credit, historically an asset class reservedfor institutional investors, has become an attractive option forthose seeking high yields with controlled risk. ACOF offersfinancial planners exposure to this lucrative asset class, withflexible entry points:Equity. No minimum investment, allowing broad participation.Debt. Minimum of R1-million, built for income generation.Economic and social impactBeyond returns, ACOF is structured to generate meaningfuleconomic impact. Since its inception, the fund has:• Deployed over R240-million in funding to SMEs.• Maintained a strong pipeline of R640-million, showing demandfor its financing solutions.• Funded businesses across 19 different economic sectors.• Created nearly 1 400 jobs in South Africa.For clients interested in ESG investing, ACOF is a clear caseof how capital drives real-world change while maintainingfinancial discipline.Real-world successACOF’s impact is not theoretical – it’s visible in the businessesand communities it helps grow. By providing fair, flexiblefunding, ACOF unlocks economic potential that wouldhave remained dormant. Here are some of the businessestransformed through ACOF’s support:Dippa Distributors. A fourth-generation fishing familythat had never owned their own vessel secured an ACOF loanto purchase a boat, allowing them to grow their businessindependently for the first time.Azowel Projects. What began as a modest vegetable farmin KwaZulu-Natal is now a high-tech hydroponic agriculturalenterprise. The result: greater food security for localcommunities and new jobs for women and youth in rural areas.Mila Restaurant. With ACOF’s support, Mila specialisesin world-class Greek fine-dining. Mila invested in its staff bysending them to Greece to train with Michelin-star chefs.The result? Over 100 new jobs, international standards and arevitalised local hospitality sector.Why act nowThe demand for SME financing in South Africa creates a longtermopportunity for investors to benefit from sustainable, highyieldreturns. With its structured approach, secured lendingand clear impact, ACOF is an investment opportunity thatfinancial planners can confidently present to their clients.By integrating ACOF into their advisory portfolios, financialplanners can offer:Attractive returns. 26% IRR forequity investors and Prime +2% fordebt providers.Portfolio diversification. Exposureto the private credit market.Tangible impact. Funding thatcontributes to SME growth.Investing for impact and returns is nolonger a trade-off – it’s an opportunity.ACOF makes it possible for investorsto have both. Warren Wheatley,CEO, Altvest Capital30 www.bluechipdigital.co.za
