Financial planners are often faced with a key challenge when advising clients: balancing the desire for strong financial returns with the growing demand for investments that drive positive social and economic impact. The perception that impact comes at the cost of returns, or vice versa, has historically kept investors from seizing opportunities that could achieve both. The Altvest Credit Opportunities Fund (ACOF) is one such example. ACOF delivers private credit returns that are competitive andcontribute to economic development by funding South African SMEs. With equity investors earning an internal rate of return (IRR) of almost 26% per annum for a seven-year period, and debt providers earning Prime +2%, ACOF offers a compelling investment case that aligns financial growth with meaningful impact.
South Africa faces a staggering SME funding shortfall, estimated at over R500-billion. Traditional banks often view SMEs as risky, and businesses are pushed towards expensive non-bank financial institutions (NBFIs) that charge predatory rates – sometimes exceeding 100% annually. This leaves many SMEs in a financing trap.
Private credit
ACOF provides structured, secured loans to high-potential SMEs. These businesses represent the backbone of South Africa’s economy, yet they struggle to access funding. The fund bridges this gap while ensuring investors benefit from a well-managed portfolio of diversified loans, supported by strong risk management protocols and collateralised lending structures. Private credit, historically an asset class reserved for institutional investors, has become an attractive option for those seeking high yields with controlled risk. ACOF offers financial planners exposure to this lucrative asset class, with flexible entry points:
- Equity. No minimum investment, allowing broad participation.
- Debt. Minimum of R1-million, built for income generation.
Economic and social impact
Beyond returns, ACOF is structured to generate meaningful economic impact. Since its inception, the fund has:
- Deployed over R240-million in funding to SMEs.
- Maintained a strong pipeline of R640-million, showing demand for its financing solutions.
- Funded businesses across 19 different economic sectors.
- Created nearly 1 400 jobs in South Africa.
For clients interested in ESG investing, ACOF is a clear case of how capital drives real-world change while maintaining financial discipline.
Real-world success
ACOF’s impact is not theoretical – it’s visible in the businesses and communities it helps grow. By providing fair, flexible funding, ACOF unlocks economic potential that would have remained dormant. Here are some of the businesses transformed through ACOF’s support:
- Dippa Distributors. A fourth-generation fishing family that had never owned their own vessel secured an ACOF loan to purchase a boat, allowing them to grow their business independently for the first time.
- Azowel Projects. What began as a modest vegetable farm in KwaZulu-Natal is now a high-tech hydroponic agricultural enterprise. The result: greater food security for local communities and new jobs for women and youth in rural areas.
- Mila Restaurant. With ACOF’s support, Mila specialises in world-class Greek fine-dining. Mila invested in its staff by sending them to Greece to train with Michelin-star chefs. The result? Over 100 new jobs, international standards and a revitalised local hospitality sector.
Why act now
The demand for SME financing in South Africa creates a long-term opportunity for investors to benefit from sustainable, high-yield returns. With its structured approach, secured lending and clear impact, ACOF is an investment opportunity that financial planners can confidently present to their clients. By integrating ACOF into their advisory portfolios, financial planners can offer:
- Attractive returns. 26% IRR for equity investors and Prime +2% for debt providers.
- Portfolio diversification. Exposure to the private credit market.
- Tangible impact. Funding that contributes to SME growth.
Investing for impact and returns is no longer a trade-off – it’s an opportunity. ACOF makes it possible for investors to have both.
