Enterprise & Supplier Development
LEAD ESD Fund
Ongoing amendments to the B-BBEE Codes places continual pressure on measured entities to achieve compliance and retain their B-BBEE status level. Often requiring specialised resources, this exercise is complex, demanding substantial management time and focus. The LEAD ESD Fund delivers a simple, coherent solution that achieves transformation and social impact whilst also enhancing shareholder value. Measured entities are now able to convert their ESD compliance from an annual income statement expense that negatively impacts shareholder value, into a once-off balance sheet investment that delivers annual and on-going ESD recognition whilst simultaneously generating measurable social impact. Offering a 70% benefit factor , the Fund provides a cost-effective, fully outsourced solution.
The Fund is managed via a life pooled investment portfolio which is a unitised portfolio of assets into which multiple policy holders (Measured Entities) can choose to invest. The platform has a linked life license, is well regulated and meets all regulatory governance and compliance.
LEAD is the appointed Asset Manager of the Fund and is responsible for the sourcing, screening, structuring and monitoring of the underlying investments. LEAD follows an investment policy which aims to secure optimal social returns, i.e. that the Fund will make a meaningful difference in the sectors it invests in, whilst targeting capital preservation for the Client. Capital raised is used to provide concessionary funding to a portfolio of pre-screened and fully vetted social enterprises that have met the threshold of LEADs due diligence process.
BENEFITS OF INVESTING
- Verification of investment: Investors will receive a complete set of audit documentation that forms the basis for the verification of their ESD compliance
- Creation of Shareholder Value: Investors convert their ESD spend from an annual income statement expense to a balance sheet asset that retains value through targeted capital preservation
- Maximum Impact: Investors have access to an ESD solution that delivers social value alongside their B-BBEE ESD points, with 95% of their contribution (net of fees) reaching the beneficiary
- Cost Effective: Investors achieve annual and ongoing recognition for so long as they remain invested in the Fund
- Risk Sharing: Investment risk is shared amongst multiple investors across multiple beneficiaries
- More than B-BBEE compliance: In addition to being in alignment with B-BBEE Codes, the Fund delivers social transformation in key areas of need
- Outsourced Solution: Fully outsourced solution frees up management to focus on core business
- Regulated Investment Product: LEAD Impact Capital (Pty) Ltd is a registered asset management business (Licence no. 50498) and 27Four Life (RF) Limited is a registered long-term insurer. Fund administration is performed by Prescient Fund Services (Pty) Ltd.
- Experienced fund management team
- Collective Approach: Investors are part of a solution where the collective is vastly more powerful than the individual parts demonstrating that 1+1 can indeed be >2
- Competitive fee structure.
Specialist Fund Management Services
LEAD offers specialist fund management services to clients who wish to outsource all or part of the management of their ESD endowments. Services include:
- Fund set up – Investment vehicle, fund mandate and governance structures
- Investment due diligence – sourcing and screening investment opportunities
- Deal structuring and implementation
- On-going monitoring
- Impact measurement.
Unlike its competitors, LEAD offers a curated solution based on the needs of each client. By creating sustainable and measurable systemic change through the investments it makes, LEAD targets more than just the one-dimensional metrics of job creation and revenue growth. LEAD can generate and report on impact at a granular level, directly linking the impact generated by its investment to the SDGs.
LEAD has launched a blended financing model that combines compassionate philanthropic capital, ESD endowments and commercial investment capital to scale post-seed enterprises seeking their first round of significant funding. Investments at this stage are often smaller in size, perceived as riskier, and associated with higher transaction and business advisory costs. However, LEAD has the expertise and innovative finance model to combine and leverage both capital and capacity to scale enterprises requiring between R1m – R10m, whilst targeting capital preservation and competitive returns for investors.
LEAD has launched a blended financing model that combines compassionate philanthropic capital, ESD endowments and commercial investment capital to scale post-seed social enterprises seeking their first round of significant funding. Investments at this stage are often smaller in size, perceived as riskier, and associated with higher transaction and business advisory costs. However, LEAD, in partnership with IA, has the expertise and innovative finance model to combine and leverage both capital and capacity to scale social innovations requiring between R1m – R5m, whilst targeting capital preservation and competitive returns for investors.
LEAD’s investment team collectively has over 30 years of direct experience in the structuring and analysis of high impact unlisted debt investments. Having managed several high impact investment portfolios that have delivered consistent above average investment returns, and 100% capital preservation for investors, LEAD aims to meet a large funding gap for early-stage impact ventures, that are typically too small in investment size, to be of interest to traditional institutional investors in South Africa.
The entrepreneurs we support demonstrate high potential to generate social and / or environmental impact through their innovative, profitable and scalable solutions. Through financing tailored to each entrepreneur, we seek to boost the growth of their companies and thus catalyse their impact.
Through its funding solutions LEAD can find the most talented early stage, post revenue companies, scaling them beyond the first round of significant funding. In this way we are building a pipeline of impact investments that can access commercial capital from larger institutional investors. We play a vital role in the scalability and sustainability of these conscious entrepreneurs who through their awareness will play a positive and inclusive role in the development of our continent, as well as being a valuable contributor to the impact investing ecosystem.