It’s been two years since Altvest burst onto the South African investment scene, promising to democratise private equity by offering a way into private companies for small investors. The challenge, however, was more daunting than anticipated and only two listings have been concluded to date – far from the ‘one a month’ that had been anticipated. But founder and CEO Warren Wheatley says lessons have been absorbed – and this week Altvest announced the appointment of a new chairman and three fresh directors which is likely to give the visionary concept fresh impetus. In this interview, Wheatley, new chairman Stafford Masie and one of the new non-executive directors GG Alcock share their excitement. – Alec Hogg
Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.
Watch here
Relevant timestamps from the interview
00:00 – Introductions
01:11 – Warren Wheatley on Altvest’s leadership shake-up
04:57 – Stafford Masie on taking the role of Altvest Chairman
08:51 – GG Alcock on his new role at Altvest
12:06 – Alcock on success stories from the ‘Kasi’ economy
14:07 – Wheatley on Altvest’s investment plans
16:07 – Alcock on his vision for Altvest
17:41 – Masie on his role and plans for Altvest
21:09 – Wheatley on the future of Altvest
23:33 – Wheatley on time allocation between the new leadership
24:19 – Alcock on his passion for Altvest
24:56 – Masie on his commitment to Altvest
26:55 – Concludes
Listen here
The edited transcript of the interview
Alec Hogg: Warren Wheatley, Stafford Masie and GG Alcock, really good to have you all together. Warren, Altvest is your brainchild. It’s been a little slower to start than we anticipated, but now you’ve grabbed it by the throat and shaking it around, bringing new people ont0 the board. Big moves. Tell us the story.
Warren Wheatley: Alec, it has been frustratingly slow, but we have had some hurdles that we had to get across. One of the biggest ones was that we realised quite quickly how constrained the retail investor is, particularly for an asset class that should only be a very small percentage of any investor’s portfolio. So we realised quite quickly that we needed to access institutional capital as well. So we needed to be able to invest or allow investments by pension funds, provident funds, insurance companies and the like.
And quite simply, when you start accepting money from them – the savings of widows and orphans – you’ve got to make sure that your governance is top tier. The team around who are entrusted with that privilege and responsibility of managing those assets, exhibit the highest levels of ethics, governance and so forth. I’ve got more board members at AltVest than actual staff for now, but I think that’s a good thing. Each of the new team members were handpicked to drive a particular strategy vertical within the business.
Stafford Masie, as an example, is a technology expert. And technology is going to allow for mass adoption and for entry points into all these other markets. GG Alcock knows his way around every ‘Kasi in the country. And we also want to go there. We want to change the direction of capital flows from the townships into the banks in Sandton; to from the banks in Sandton into the township economies. GG knows the route from there. And we’re going to use technology. We’re going to use education. We can use the structure we’ve built to do those things. We’ve got other board members as well.
One is Christo Geyer, he’s an actuary and has been in the investment game almost all his career. And then Khaya Sithole, who’s quite a esteemed accountant on top of IFRS and all the accounting standards, but is also a very popular current affairs commentator. They’re equally welcome, and each of them has also been deliberately handpicked for a particular role.
Read more: Disruptive alternative investment platform Altvest to secondary list on A2X
Alec Hogg: Warren, that’s a great introduction. Stafford Masie and I have been friends for many, many years. He was on my board at MoneyWeb, and I venture to say that had GG been around at the time he would also have been on that board as would you, Warren. So I can feel where your thought processes are going. But Stafford, you’ve got a lot on your plate. You’re a director at the CSIR, you’ve got your own business with your wife Lisa Raleigh, which we’ve spoken about a lot on BizNews. And you’re also on the board of Discovery Bank. So there’s plenty going on in your life. Why become chairman now of AltVest?
Stafford Masie: When Warren approached me, it was a lot of thinking and a lot of deliberating. And I don’t think so much about it from a time perspective. You know, what I was really intrigued by was the company, the methodology that he had personified. I mean, this way of investing, the promise that it holds, it’s a beautiful mechanism. That was really, really intriguing. Obviously, I’ve known Warren through the BizNews community, too. This is where we met the first time. It’s a beautiful mechanism. That’s what we’re going to be talking about, engaging from that perspective on what the intention is of the business, where this business can go and what this business could mean to the South African economy.
The conviction that lies behind Altvest really drove me. I think this is one of those things that I need to do that’s outside of my capitalistic views in terms of my investments. So yeah, there’s a lot on the plate, but I think what Warren and the team have already built is a mechanism that requires the necessary leadership, a very clear vision around how we’re going to execute , a good governance framework, and I think then they will come……
I don’t think this is going to be difficult. And I think with the right team, which is now coalesced, we have the proper mechanism here for what it required to take that next step to that next level. I’m excited about it. As you know, I get approached to join many, many boards. But this was one where I felt it could have meaningful impact. And I could lean in and bring something to the table to really help the team to have that impact. So that was the drive, the conviction around what this could mean if we truly scaled this and had the impact that we are articulating in our slides and in our collateral. And if we do that, this will be worthwhile.
This is not just another board that I’m joining. This is something that I fundamentally believe in. You know, growing up in Eldorado Park, in a township, I understanding the economy from that very basis, all the way up to, you know, the larger businesses in South Africa. I think this is what’s required right now. We’ve got to re-envision. We can’t just wait for government to catch up. We can’t wait for someone else to come along. I think this is one of those mechanisms, one of those platforms that re-imagines capital participation. In a way, from a micro level all the way to a macro level.
The beauty of this model, the simplicity of it is really, really intriguing. And that attracted me. And as chairman, I’ll bring along the experience of the other boards that I’ve been on. I was on the board of Advertech for seven and a half years. And that’s where I really learned what a board looks like in a listed company. And I learned a lot there. The Discovery Board is an incredible board too, with an incredible group of human beings. Hopefully, with this team, we can build something with the proper structures that enables this team to do what they’ve already started, but really accelerated.
Read more: Artificial Intelligence 101 – Stafford Masie’s user’s guide to our very different future
Alec Hogg: The dream is unquestionably visionary and inspiring. The execution, however, can be challenging, especially for a startup. It’s interesting to watch AltVest’s evolution from a startup into a grown company. As you said Stafford, you grew up in Eldorado Park – and GG, in a mud hut in Msinga. You both bring an understanding of the South African informal sector. GG, could you elaborate on the areas you will be focusing on in your board position?
GG Alcock: Initially, I had some reluctance to join the Altvest board as I have never been a corporate person, but Warren and I had several discussions. My passion is the entrepreneurial sector, especially in the townships. This sector is largely ignored by the traditional business world, yet it represents a significant opportunity for economic growth. The main challenge is scaling these businesses up. I’ve written about and invested in this sector and am excited about contributing to its growth. I have a unique access to both the formal traditional side and the dynamic, unique, informal end of the spectrum.
Alec Hogg: Given the opportunities and the individuals we’ve spoken to from the ‘Kasi economy, if you could provide them with the capital, could we see growth?
GG Alcock: Absolutely. One example is a lady who earns R150,000 rental a month from backyard units, and is building 30 more units. She’s expected to earn about R250,000-300,000 a month. Similarly, a tavern I visited was turning over R900,000 a month, contrary to the rep’s assumption of R300,000. These businesses are eager to expand and provide great opportunities for acceleration.
Alec Hogg: Warren, this would be quite a departure from Altvest’s previous investments – Umganu Lodge was a R40 million project and the Bambinani Family group capitalised at was a R27 million. How does Altvest plan to handle these smaller, growing businesses?
Warren Wheatley: Alec, we’re considering a portfolio of assets where we provide access to a collection of ‘Kazi businesses, rather than individual asset exposure. It’s akin to a unit trust composed of two or three hundred different businesses. So we’re considering creating a diverse portfolio, incorporating risk mitigation strategies, to allow for institutional capital to flow into it. However, ensuring that the capital reaches the treasury of these businesses is a challenge we’re currently working on. Because raising capital for a single asset is too costly unless it is R10 million or more, so we’re taking a portfolio approach. This portfolio will consist of hundreds of businesses generating cash flow and jobs. That’s our vision.
Alec Hogg: That’s a brilliant idea. Is this model inspired by the Grameen Bank in Bangladesh?
GG Alcock: Yes, in a way. The Grameen Bank, one of Asia’s biggest banks, has successfully demonstrated the power of supporting smaller businesses. Though my vision might not always align with Altvest’s, I believe in the opportunity, especially as Altvest is exploring alternative routes.
Alec Hogg: Indeed, the Grameen Bank started by lending a few hundred dollars to women to buy basics like sewing machines and grew to be one of Asia’s largest banks. Stafford, will you be persuading corporations in South Africa to see this opportunity?
Stafford Masie: Yes, and it’s not just about the informal economy. Even tech startups in South Africa could benefit from this platform. The problem with startups in South Africa is their lack of access to capital, due to the lack of mature venture capitalists. The capital raising stages for these startups are challenging in our current environment. Yet we have incredible entrepreneurs with ideas of global significance. If Altvest’s mechanism had existed during my time as a technology entrepreneur, I could have raised capital much faster.
We’re also aiming to bring in large institutional corporations, not just South African, but multinationals too. Companies like Google and Meta are trying to establish African strategies but struggle to participate economically in South Africa due to the lack of supporting capital structures. Altvest could provide a platform for these institutions, which is exciting.
Read more: iJob iJob: The mystery of unemployment increases! – GG Alcock
Alec Hogg: As we wrap up, Warren could you tell us how the experiences and lessons you’ve learned over the years are going to shape AltVest’s future, particularly with the new members you’ve brought on board?
Warren Wheatley: Alec, our main objective is to demonstrate to the market our serious commitment to governance. My team and I understand the responsibility and privilege of managing and effectively deploying money where it’s needed in the country. We’ve built structures that meet the most stringent regulatory requirements and are Reg 28 compliant. We’ve put time into designing how to gather and deploy capital so that any international or South African entity can invest comfortably. I’ve realised that to make a difference, we need to be bold and aim big. For that, we need the right leadership team. With the team that has remained and those we’ve added to our board, I believe we’re well-positioned to demonstrate our capability to execute our vision. Now, we need ambassadors to take it across South Africa and beyond.
Alec Hogg: The new board members and busy people – how much time are you expecting them to allocate?
Warren Wheatley: From my experience, when you’re passionate about something, you find the time for it. In my discussions with the new board members, I see that they’re really excited about this project. So while these aren’t full-time roles, I expect the passion will drive the involvement.
GG Alcock: I agree. Often we get stuck in our day-to-day routines and our passions take a back seat. But this project aligns with my goal to drive economic transformation, so I’m definitely willing to invest my time.
Alec Hogg: And what about you, Stafford?
Stafford Masie: I believe in taking action when it matters. Someone has to lean in and do this. Managing time efficiently is something I’ve learned as a professional. The Altvest team has built a mechanism. What’s needed now are the structures to open doors and have important discussions. I don’t see this as a startup needing daily operational oversight. As the chairman, my focus will be on ensuring accountability and building the structures that make us a responsible business. It’s crucial that we build trust with our investors, from the smallest to the largest, and assure them that this is a sound place to invest their money. In my view, taking this mechanism to the next level won’t be too difficult from a time perspective.
Read also:
SA’s new generation entrepreneurs: Meet township baking mogul Refiloe Rantekoa – with GG Alcock
SA fire-fighting giants extinguishing the World’s wildfires – Trevor Abrahams
Time to rein in ‘unthinkable’ lack of oversight on Presidency’s budget” – FF Plus Chief Whip Corné Mulder
Visited 281 times, 281 visit(s) today
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : BizNews – https://www.biznews.com/interviews/2023/07/28/altvest-mk-ii-stafford-gg-wheatley