ProfitShare Partners announced on Tuesday that it will serve as the SME growth enabler for the True Impact Fund – an investment and advisory firm that specialises in Enterprise and Supplier Development (ESD) solutions for corporate South Africa.
True Impact has committed to raising R100 million in funding for ProfitShare Partners over the next three years.
The investment fund manager has recently introduced transformation solutions that deliver immediate results for corporate ESD spend.
What sets the firm apart from other providers in the industry is that it deploys 100% of the funds directly to SMEs and charges no management fees. Corporates benefit from immediate ESD points to ensure full compliance.
“One of the challenges that we want to address in the enterprise and supplier development space is to reshape the thinking around ESD – that it is not merely a tickbox exercise for compliance,” said Siva Moodley, CEO of True Impact Fund.
“Ultimately, the Codes are about more than that, which is why we’ve launched our SMME Fund. We invest corporate spend directly into small businesses through our portfolios with maximum impact for both the corporate and SMME markets.”
The investment management company has launched its SMME Fund with a high SME impact focus that delivers high compliance results. With True Impact, corporate ESD is invested directly in SME development through proven structures, like the ProfitShare Partners funding model.
“ProfitShare Partners’ business model has created immense impact in the SME industry since inception. We’ve assisted several SME clients in growing their turnover tenfold in 12 months. We’ve also achieved a 97% collection rate in a market that is perceived to be high risk and grew our funding book value 400% in one year,” says Andrew Maren, CEO of ProfitShare Partners.
As a disruptive funder that has already proven results in the SME sector, ProfitShare Partners innovative business model is designed to create a high growth tool for SMEs by partnering purely on the transaction, rather than acquiring equity in small businesses.
As a direct result, ProfitShare Partners can partner with the same SME on numerous transactions.
“The True Impact Fund is a major transformation solution for corporate South Africa. SMEs are in serious need of funding and the True Impact Fund will go a long way to address some of the demand. We create real impact for true transformation,” added Moodley.
The SMME Fund is the first offering that True Impact is introducing to the market. Its mission is to raise R1 billion in the next three years and fund over 2,000 SMMEs.
The Fund also intends expanding its offering to present more holistic investment portfolios to the corporate market in the next year. These portfolios include the Sharia Fund, the Equity Fund and an Artificial Intelligence (AI) Fund among others.