The Covid-19 pandemic has tested business leaders on every level. Assessing and considering its options early turned out to be key to the survival of Section 12J investment company Anuva Investments
WORDS AND PHOTOS: SUPPLIED
Most businesses have been on one end or the other of the scale during this global crisis. Some have been fortunate enough to be offering a service or product that has been in demand during lockdown while others fell on the dismal end of the scale, suspended and wading their way through the muddy waters. Covid-19 has tested our resilience as business leaders. And in true South African style, companies have demonstrated grit and resilience during this blind-sider of a pandemic, finding opportunity and a means to adapt their businesses, if only to keep their staff employed. Speaking at an online investment report-back meeting, Neill Hobbs, CEO of Anuva Investments, said assessing and considering their options early was key to the survival of businesses in the groups’ portfolio.
One of the country’s first and most established Section 12J funds, Anuva Investments is an FSB-regulated and Fais Act-compliant venture capital company with an outstanding track record since inception. “We’ve been fortunate to have a team of progressive and agile managers who put their heads together and almost overnight formulated and actioned what we’ve coined our shift and accelerate strategy,” Hobbs says. “We’ve adjusted and adapted, joining the links to initiate not only a workable, but a profitable strategy for our investments and businesses to survive and, in some cases, thrive.” According to Hobbs, an honest assessment followed by a swift adjustment was more important than they realised. “It’s about analysing expenditure, harnessing cash flow and developing new streams of revenue by driving new initiatives and finding new opportunities,” he says.
Anuva Investments recognised opportunities in the manufacturing and supply of essential medical provisions and converted its supply chain at Cape Mohair and Mastercare to meet the demands of personal protective equipment such as medical masks. The fund also invested a timeous R20m capital injection into medical supply company Biodelta. This business, which produces and distributes health and wellness products, quickly became a crucial supplier in the fight against Covid-19, extending its product range and manufacturing focus to deliver much-needed key products. Virus test kits, three-layer surgical masks, sanitisers and immune booster supplements were fast-tracked in their production output thanks to the capital advanced to fund the strategy. The news clearly was music to investors’ ears, Hobbs says. “As investment managers, we realised the potential economic devastation of the pandemic before it became an actuality. Many of our board members alerted us to the daunting realities Covid-19 was ushering in. In the spirit of Section 12J under these circumstances, job preservation and the safety and security of our people have been front of mind.”
About Anuva Investments
Anuva Investments was formed in 2014 by a team of tax and investment specialists. It invests in small and medium-sized companies where the opportunity exists to enhance profitability significantly through a management involvement process. Higher-risk investments are balanced by investments into well-established businesses with proven profitability and stable cash flows.
The positive cash flow that results from a well-structured venture capital company investment is matchless. The investor can receive a full tax deduction on the funds invested, as well as substantial dividends from the investment on an ongoing basis. A Section 12J investment carries no personal tax risk for the investor.
About section 12J
Section 12J of the income tax act provides South African taxpayers with a 100% tax liability deduction on the amount invested into a qualifying Section 12J fund. This allows an individual, company or trust to claim tax relief of up to 45% on the investment amount.
The Section 12J investment opportunity is an incentive created by government to boost much-needed job creation in SA. Section 12J companies provide an investment vehicle that offers tax relief to a maximum of R2.5m per investor per tax year, with a minimum investment period of five years.
The investment is made in identified start-ups or existing business entities in preferred sectors of the economy with an emphasis on job creation. Tax beneficiaries invest directly in the Section 12J fund, which in turn invests in the identified business.
Get in touch
Tel: 021 683 0500