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Optomise Alternative Investments recently partnered with Stockdale Street’s CCP S12J fund, to create the third largest S12J asset manager in South Africa with R340 million assets under management.
This consolidation transaction of S12J asset managers is the largest in South Africa’s fast growing S12J industry. Established in 2015, Optomise manages an investment portfolio of 25 diversified S12J investments across various high growth sectors including prime-located hotels, Uber vehicle fleet rentals and solar energy installations.
CEO of Optomise, Gadi Cohen says, “The South African S12J industry has matured as more sophisticated investors become aware of the tax benefits of S12J investments. Partnerships between S12J asset managers are inevitable as the S12J market is poised for consolidation following the refinement of the S12J regulations.”
Top financial institutions, banks and private wealth boutiques are offering S12J investments to their high net worth clients as an alternative investment to traditional unit trusts which have disappointingly underperformed over the last few years. The primary objective behind the S12J tax incentive is to attract local investors to South African investments that generate thousands of jobs for the country.
Over the last few years, investors in the S12J industry have collectively created over 27,000 jobs for the South African economy through investments into qualifying SMMEs. Job creation has become especially critical in the current market environment of wide-spread retrenchments and low investor confidence.
Cohen adds, “In a low growth and uncertain economy investors seek capital guaranteed investments and certainty with regards to returns. Optomise’s investment philosophy is to invest in real assets, like prime-located hotels, that generate solid real returns. We are able to enhance these returns using numerous tax incentives as well as applying minimum guarantees.
As an example, the S12J investment in the first Voco Hotel in South Africa (pic above) provides a minimum guaranteed income, full capital protection, a minimum guaranteed capital growth and most importantly a guaranteed exit after four years.
These guarantees are provided by the Blend Property Group, an unlisted property fund with a R2 billion diversified commercial portfolio. As with all S12J investments, investors gain the S12J tax benefit of up to 45% on subscription for the new shares in the Optomise S12J Fund.”
The partnership between Optomise and Stockdale Street’s CCP S12J fund will enable the development of more diverse S12J investment opportunities as well as the creation of even more jobs. Optomise envisions S12J contributing significantly to the South African economy going forward, delivering innovative and high growth opportunities for the country.
