Heart Impact Fund

The overarching purpose of the Heart Impact Fund is to identify, nurture and scale up South Africa’s most talented for-profit, pro-poor, social entrepreneurs and ensure their long term success. The Fund will finance the ramp up of social enterprises with high growth, high impact potential that are selling their products and services at the BoP. Capital will be employed via an Asset-based Special Purpose Vehicle (SPV) that facilitates mezzanine debt finance for the acquisition of income generating impact-assets to scale up, replicate and/or roll out in other regions and make them profitable.

The Heart Impact Fund will follow the structure of an Asset-based Special Purpose Vehicle (SPV) that facilitates mezzanine debt finance for the acquisition of income generating impact-assets. The Fund is capitalized by 5 year term notes issued to impact investors.

The Heart Impact Fund is a registered private limited company in South Africa (Reg No: 2012/089190/07) with 100 shares in issue. These shares are currently held by Heart Equity Holdings. Heart owns a major equity stake in all its portfolio ventures, thus incentivizing the performance of the fund manager beyond ROI for external investors. Heart Capital has exclusive mandates to raise capital for its portfolio ventures.

Financial description

The Heart Impact Fund will finance the ramp up of social enterprises with high growth, high impact potential that are selling their products and services at the Base of the Pyramid. Capital will be employed via an Asset-based Special Purpose Vehicle (SPV) that facilitates mezzanine debt finance for the acquisition of income generating impact-assets to scale up, replicate and/or roll out in other regions and make them profitable. Investors make a loan to the SPV, while all equity instruments will be held by Heart Equity Holdings.
By offering access to funding in conjunction with comprehensive business development support, Heart Capital creates a complete enabling environment for commercially promising start-up social entrepreneurs. Other players in the South African social enterprise space offer partial forms of this model, such as funding without business development support or vice versa. Few organisations are able to provide a complete service package for social entrepreneurs. The combination of the Incubator that provides technical assistance and the Fund Firm that provides capital forms a Social Enterprise Accelerator that aims to speed up the time to market and fast track the success of talented, emerging social entrepreneurs. Heart owns a major equity stake in all its portfolio ventures, thus incentivizing the performance of the fund manager beyond ROI for external investors. Heart Capital has exclusive mandates to raise capital for its portfolio ventures.