As Altvest Capital prepares to investigate the feasibility of a launch of the Altvest Orient Opportunities Fund on the Johannesburg Stock Exchange, we are excited to present an unprecedented opportunity for South African investors to access one of the world’s most dynamic and promising venture capital markets: China.
This listing brings to South Africa an investment vehicle previously reserved for institutional and high-net-worth individuals, offering retail investors and retirement funds access to the unparalleled growth and diversification opportunities that Chinese venture capital (VC) provides.
My recent visit to China cemented my confidence in the country’s powerful economic trajectory, particularly in sectors like technology, biotechnology and renewable energy. These industries are aligned with China’s long-term growth objectives and bolstered by robust government support, creating an environment where innovative companies are scaling rapidly.
Through the Altvest Orient Opportunities Fund (AOOF), Altvest is making these exclusive opportunities available on the Johannesburg Stock Exchange (JSE), marking a pivotal shift in South African investment options.
A gateway to China’s thriving VC ecosystem
The VC market in China is the second largest globally, driven by the country’s evolution from “the world’s factory” to a high-tech innovator. China’s VC landscape is bolstered by a booming domestic market, extensive R&D investment and government support in targeted sectors. This presents tremendous growth potential in industries at the forefront of global innovation, such as artificial intelligence, life sciences and renewable energy.
For instance, companies like WeRide in autonomous driving and Zeekr in electric vehicles are scaling to global prominence with support from the VC ecosystem. The country’s five-year plans specifically promote growth in these sectors, giving investors in Chinese venture capital a unique alignment with national strategic priorities.
However, the exclusivity of Chinese venture capital has meant that most retail investors cannot participate due to high minimum investments, commitment-based structures and limited liquidity. Traditional VC funds typically require large sums of committed capital, sometimes locked for a decade or more with no secondary market for exits. In contrast, AOOF’s listing on the JSE addresses these barriers by providing retail investors a pathway to high-growth opportunities within a regulated, publicly-traded structure.
Structured for flexibility and high-growth potential
Altvest has designed the AOOF with a phased, diversified investment strategy to manage risk and maintain flexibility. The initial capital raised will be placed in liquid, China-focused public equities and short-term treasury instruments, ensuring immediate exposure to Chinese economic trends while providing a flexible treasury function.
This strategy allows us to deploy capital into high-potential, venture-backed startups as opportunities arise. RisCura, our trusted partner in managing AOOF, brings significant local presence and expertise in China, leveraging deep networks and due diligence capabilities to navigate this complex market. With over a decade of experience in Chinese markets, RisCura offers essential on-the-ground insights, an invaluable advantage when investing in emerging markets.
The AOOF then transitions to a focus on venture capital, capitalising on high-growth companies at various stages of development. This approach diversifies the portfolio across emerging sectors and growth stages, balancing risk while maximising potential returns. Through our partnership with RisCura, we’re investing in funds like the Orient Opportunities China Venture Capital Fund (OOCVCF), gaining access to exclusive opportunities in sectors identified as core to China’s growth trajectory.
Comparative fee structure: accessing venture capital without the premiums
One of the most attractive aspects of the AOOF is its competitive fee structure. Traditional VC funds charge substantial fees, often comprising a 2% management fee and 20% performance fee, or “carry”. For instance, prominent VC funds in the United States and Europe operate on a “2 and 20” model, which can significantly impact investor returns, especially over long investment horizons where fees accumulate.
In contrast, the AOOF offers a 1% annual advisory fee, a 2% initial fee and a 5% carry, making it a more cost-effective alternative. This structure benefits both professional and retail investors by reducing the fee burden, ultimately allowing for more capital to be deployed in the market and enhancing potential returns. For South African investors, this means an affordable entry into one of the world’s fastest-growing VC ecosystems, previously out of reach for most individuals and smaller funds.
Exclusive access to high-growth markets
The AOOF listing on the JSE democratises access to venture capital in an emerging market while allowing retail investors to benefit from a secondary market for potential liquidity. This setup differs significantly from the commitment-based structures typical in the venture capital industry, where investors are locked in for long periods with limited liquidity options. By listing Class D shares, Altvest provides a flexible exit mechanism – a unique advantage for retail investors, especially in the venture capital space, where liquidity is notoriously constrained.
Through the AOOF, retail investors can participate in a sophisticated asset class with a level of access, transparency and flexibility that has not been available before. This innovation aligns with Altvest’s mission to democratise finance, empowering ordinary South Africans to participate in global growth.
Understanding the rewards and risks of venture capital
Venture capital is a high-risk, high-reward investment that focuses on early-stage companies with the potential for exponential growth. Historically, VC funds follow a “power law” distribution where a small number of investments yield outsized returns, while many others may fail or underperform. This pattern is both a risk and an opportunity: it underscores the importance of selecting the right investments and the expertise required to navigate volatile and emerging markets like China.
The AOOF’s structure, which combines immediate liquidity options with strategic VC investments, is designed to provide a balanced risk-return profile. However, investors must understand the volatility inherent in venture capital. Market conditions, regulatory changes and geopolitical tensions are all factors that may impact returns, particularly in a complex and fast-evolving market like China’s.
Our partnership with RisCura, a firm with a decade of experience in Chinese markets, ensures that we are well-positioned to navigate these challenges with expert insights and disciplined management.
Why IFAs should consider AOOF for their clients
For financial advisors, the AOOF represents an innovative addition to any diversified portfolio. The Fund’s exposure to high-growth sectors like technology, healthcare and renewable energy – paired with competitive fees and enhanced liquidity options – offers a compelling opportunity for clients seeking returns beyond traditional asset classes. With an expected listing on the JSE, the AOOF provides IFAs with a unique tool to broaden their clients’ portfolios, particularly in high-potential, non-correlated markets.
The Chinese venture capital market is a powerhouse of innovation and growth, and we believe that the AOOF provides a fitting vehicle for South African investors to access this potential. As Altvest prepares to launch this fund, we invite IFAs and CERTIFIED FINANCIAL PLANNERS® to explore how the AOOF can meet the growing demand for alternative investments among South African investors.
For more information about the Altvest Orient Opportunities Fund and how to participate in this landmark offering, please visit our website or contact our team.
www.altvestcapital.co.za
Also see: The Altvest Orient Opportunities Fund is opening doors
