Who are the people behind Kalon?
Please visit the team section for more information about the team, click here.
What investment restrictions must a 12J fund adhere to?
The company must satisfy the following requirements by the end of each year of assessment after the expiry of 36 months from the first date of issue of Venture Capital Shares:
- A minimum of 80% of the expenditure incurred by the VCC to acquire assets must be for qualifying shares, and each investee company must, immediately after the issuing of the qualifying shares, hold assets with a book value not exceeding: o R500 million in any junior mining company; or o R50 million in any other qualifying company
- The expenditure incurred by the VCC to acquire qualifying shares in any one qualifying company must not exceed 20% of any amounts received in respect of the issue of Venture Capital Shares.
A 12J fund, further has a discretionary investment leeway of 20% of raised capital to invest in non-qualifying companies.
What are the tax implications of section 12J?
By investing in Kalons fund, the full amount invested is 100% tax deductible. Section 12J offers individuals, funds, trusts and companies resident in South Africa, an attractive tax rebate on investments into the appropriate 12J Fund. The tax rebate is up to 45% for individuals, funds and trusts and 28% for companies.
By way of illustration:
Description | Individuals/Trusts | Corporates |
Initial Investment | R 1 000 000 | R 1 000 000 |
Tax relief (in the tax year of initial investment) | (R450 000) | (R280 000) |
Net Investment (Risk Capital) |
R550 000 | R720 000 |
Effective tax relief | 45% | 28% |
What is Section 12J of the income tax act?
Section 12J was set up by government to promote the economic growth of small to medium sized businesses. By doing so, providing equity finance to these companies, government has allowed for a full tax break. Please refer to the Section 12J section of this website for more information, click here.
At what stage will Kalon consider investing in a business?
Kalon typically invests in companies that are revenue producing. However, we are open to investing in companies which have a proven model and can show traction.
Who qualifies for investment?
- We typically invest in companies with: Strong management team
- Clearly defined exit strategy
- Scalable business model (profits increase faster than revenue)
- Early stage with a revenue and profitability track record which require growth capital – a large percentage of the overall portfolio
- Early stage businesses with revenue but not yet profitable
- Traction with a referenced client base
- High growth potential market opportunities – cross border growth prospects with export potential, incl. business models with potential for significant scale both within South Africa and abroad
- High gross margins and potential for recurring revenue
- High revenue and profit growth potential
- Strong competitive position within their targeted sector with differentiated Intellectual Property (IP) – unique products
What industries does Kalon invest in?
Kalon invests in disruptive digital technology high growth companies, that provide technology based solutions. Kalon invests in technology companies across all industries.
How risky is it investing in this fund?
As this fund invests in relatively small and young companies there is an inherent risk of loss of capital. Investing in a fund like this comes with a medium to high risk. Knowing such, an investor should not invest a large proportion of their wealth in this fund. It is suggested that no more than 5-7% of one’s portfolio should be invested in Kalon.
Which companies has Kalon invested in so far?
Please refer to the portfolio page for more information, click here.
What is the projected return for the fund?
The projected return of the fund is expected to exceed 30% per annum.
What is the maximum the fund is expecting to raise?
Kalon aims to be the leading disruptive technology fund with assets over R1 billion.
What are the fees involved with this investment?
There will be a once-off capital raising fee of 3% on all funds raised by the Manager on behalf of the Company as well as an asset management fee of 2,5% per annum payable quarterly in advance.
What is the minimum and maximum subscription per investor?
The minimum is R100 000 with a maximum of R20 000 000, however this is subject to change and will be set out in the prospectus.
How do I report this investment to SARS for the allowable tax refund?
Investors will be entitled to deduct the full amount of their investment in Kalon from their taxable income in the tax year that the investment was made. A certificate to substantiate a claim for tax deduction will be sent to investors within 6 weeks of the closing date. Investors can claim the tax relief by claiming the deduction in their Income Tax returns.
Can we top up our initial investment?
Investors will be able to invest up to R20 million provided the fund is open for investment.
Can we invest after the 28th of February?
You will be allowed to invest provided the fund is open as specified by the latest prospectus.
How often will I be updated on this investment?
Investors will receive updated quarterly statements. There will also be an annual general meeting
When can we exit the investment?
You can exit the investment at any time, however if you exit before a period of 5 years, you will be required to pay the relevant tax rebate you received, this is set out by the section 12J act.
What do we receive once we invest?
Once you invest, you will receive a share and tax certificate. (This will also provide SARS with the proof it needs to allow for the relevant tax break).
What is the process to invest in Kalons fund?
Please see the Investor section of our website, click here.