AltVest Unpacked – Six weeks to a CTSE listing that will democratise private equity into R50 investment chunks

An ambitious plan to democratise private equity for both investors and capital-seeking companies is in the final straight. After a year’s intense focus, AltVest is getting ready to list on the Cape Town Stock Exchange in six weeks. The new company will function like a private equity ETF with Economic Notes also listed on each of its individual investments, enabling investors to acquire a direct slice for R50 a pop. In this podcast, AltVest directors Warren Wheatley and Koshiek Karan explain how the exciting new company works, and why they believe it will revolutionise a sector that was previously the preserve of the one percent of the one percent.

Warren Wheatley on the official listing of the AltVest capital platform

We’re about six weeks out from the official listing of the AltVest capital platform. The public is going to be able to buy shares in AltVest and, in doing so, get exposure to all the underlying opportunities that AltVest brings to the market. What has held us up is we’ve had to raise the capital. We’re doing a direct listing by introduction, which means all your capital is raised off the market, but is then listed and becomes tradeable post-listing.

Warren Wheatley on whether there will be an IPO process when the listing happens

The process is slightly different. We do have to notify the public and the various regulatory bodies but in this particular case, it’s called listing particulars, and the content is very similar to what a prospectus or an IPO programme looks like. Why we’ve done it this way is we wanted certainty of who our strategic partners would be and to bake them into the system prior to making the product available to the market.

Koshiek Karan on the strategy of private equity into private/smaller companies

It has been a very choppy, volatile market across the last few months, evident from all the money that I’ve lost in every possible way. However, it speaks to the importance of stressing alternative investments in a balanced portfolio. Many of the assets we’re looking at are highly defensive, very resilient and generate consistent yields. What’s important is that many of the assets we’ve drilled into offer investors an offshore hedge but, most importantly, offer the ability to have liquidity because many of the alternative investments are asset rich but cash poor. Whether you’re looking at a wine farm, a property development company or your grandmother’s set of jewels … it looks great in the cupboard, but it doesn’t add a lot of value if you can’t translate that value into cash. So that is our focus. Over the last few months, we’ve had conversations with some incredible assets, sports teams, offshore property, and a few exotic types of assets that we could get into. But what we are really looking for are the boring businesses.

Warren Wheatley on boring businesses having long-term revenue, positive cash flow and great yields

The kind of businesses we want are the butchers, the bakers, the candlestick makers, guys who have established deep roots in their communities, serving customers daily and have yield. Working in a family office for quite a few years, I was able to see that the most successful people had the most boring businesses. They weren’t sexy, frantic, crypto enabled, blockchain enabled, they weren’t building robots or flying rockets to the moon. They were painting, installing road signs, fixing potholes or doing some type of service that mankind or communities couldn’t do without. Those were the guys who consistently paid bonuses to their families year after year. They constantly paid distributions to the family trusts, and they were the kind of businesses that no one has access to, except the small network of other family offices that buy and sell among each other. It has been our mission to bring those kinds of opportunities, along with the more exotic, alpha-producing stuff. We are going to get nine out of 10 of them wrong, but we want to make available the businesses that have contracts to paint roads or highways and do stuff that is long-term revenue producing, cash flow positive with great yields.

These businesses are available particularly as the founders start thinking about retirement, having no readily available second-generation guys to come in. More interestingly, in many cases, they are great businesses but need saving from the monster third-generation child who hasn’t managed it well. And then, of course, there have been other stimulants for requiring capital, Covid-19 and the general economic malaise. There are good businesses that are ready to be recapitalised and re-fired up but have been through a tough time; and our banks and other financial institutions are just not supporting them.

Warren Wheatley on investing with AltVest

You’ll start with a single brokerage access through a company called A-Trade but as we grow and capacity increases, whichever broker signs up to the Cape Town Stock Exchange will have access to all securities listed on that. For example, if Peregrine, Sanlam, Standard Bank or any other broker, linked into the Cape Town Stock Exchange, they will have access to our securities. We’re aiming to attract the retail investor market. So, anyone who has discretionary income. There’s a big fight for the share of that wallet and we understand that. We’re up against Gucci, EasyEquities, casinos…

For more information click here.

Read also: 

Visited 966 times, 1 visit(s) today