Private and Confidential

one mans
loss gain is
another
mans gain
rethinking wealth creation
Private and Confidential
 contents

1 2 3 4

opportunities overview challenger deals

5 world exports data 9 how it works 15 structure 22/23 tobacco

6 exports by region 10 introduction 16 philosophy 24/25 fresh produce

11 fund facts 17 our edge 26/27 clothing

12 investment strategy 18/19 investment 28/29 fertilizer

committee

Private and Confidential

 what sets us apart?

Private and Confidential

 think invest
outside the box
rethinking wealth creation

Private and Confidential

 overview trade finance

Private and Confidential

 Primary source of security
The Fund was is the underlying product /
established by Charles commodity within the
Taberer, Paul Taberer trade plus additional
and Gary Isbister collateral to mitigate any
in November 2015 downside risk

Each underlying transaction

The fund invests in unlisted
generally runs between
global trade finance
90 and 180 days
transactions

The fund has a

Objective is to achieve a net
global mandate
return of
with a bias towards Africa
(from a territory perspective)
10-12%
and tobacco (from a
commodity perspective) per annum for its investors

Private and Confidential

 Fund Name Challenger Trade Finance Segregated Portfolio of the South Africa Alpha SPC

Manager South Africa Alpha Capital Management Limited

Advisor Challenger Management Limited

Objective To return 10% - 12% per annum through investment in different Trade
Finance transactions across Global Emerging Markets (Net of all fees)

$100,000 Investec Bank (Mauritius)

Min Initial Investment Bank
Afrasia Bank (Mauritius)
Subscriptions Monthly Auditor Deloitte & Touche

Management Fee 2% Administrator Maitland Fund Services

20% of the annual C.Steinweg Bridge, Vallis

Performance fee Collateral
increase in the NAV of Commodities, Control Union,
the Fund Manager Katoen Natie, SGS
5% p.a. with look-back Harney Westwood & Riegels LLP
Hurdle Rate Legal Council
to Zero

Redemptions Calendar quarter with 90 day notice

Leverage The Fund will be entitled to borrow against the portfolio up to a maximum of two
times the value of equity investments. Investors to be notified of any increase in
leverage at least 90 days prior to the next redemption date.
Private and Confidential
 Investment
Objective &
Strategy
The Fund invests into collateralized,
short dated trade finance transactions
which involve all facets of the trade
cycle including the purchasing,
transportation and storing of the
underlying products as well as the final
sale of the product to the off-taker.
The aim is to maintain control and
ownership of the collateral throughout
the trade to reduce the risk of any
defaults.
Private and Confidential
The Fund was established by Charles Taberer, Paul Taberer and Gary
Isbister. Its objective is to achieve high-yielding net returns for investors
by investing in unique trade finance opportunities in global emerging
markets with a focus on trade in Africa as well as the global tobacco
industry.
The Fund may co-invest with banks and other financial institutions or utilise leverage to structure
deals that are cost effective for the client but still lucrative and secure for the Investor. The
Investment Advisor will be required to demonstrate that each transaction satisfies the principals of
‘security’ and ‘serviceability’ before any funds are deployed. The fund will make use of well
established service providers throughout the trade process to ensure that its collateral is well
controlled at all time. These services would include logistics companies, collateral managers,
insurers and reputable banking institutions.
The short duration of each underlying transaction means that the Fund will experience high
volumes of cashflows on a monthly basis. Although this may lead to “cash drag” in some months,
it allows the fund to crystalize its returns regularly.
 money doesn’t can
grow on trees
rethinking wealth creation

Private and Confidential

 Investing in Challenger

Private and Confidential

 SOUTH AFRICA ALPHA STRUCTURE

INVESTOR
CASH SHARES

Challenger Trade Finance Segregated Portfolio of the South Africa Alpha SPC | Cayman

This is one of the Segregated Portfolio’s on the South Africa Alpha SPC platform

INVESTMENT MANAGEMENT AGREEMENT

South Africa Alpha Capital Management | Bermuda

SAACM is the appointed Investment Manager for all funds on the platform

INVESTMENT ADVISORY AGREEMENT

Challenger Management Limited (CML) | Mauritius

CML is appointed to advise SAACM and sign off on all of the Challenger Trade Finance Segregated Portfolio
transactions

Private and Confidential

 INVESTMENT PHILOSOPHY

Balance Transaction
Sheet Specific
Lending Lending

Review Profitability Review Profitability

Diversity of income streams Volatility of underlying commodity
Gross margin on product Impact of financing on profit margin

Assess Balance Sheet Assets Assess Transaction Dynamics

Unencumbered assets Quality of the off-taker
Aging of stock and debtors Stock liquidation values
Recoverability of debtors Quality of service providers
Stock liquidation values

Prepare Deal Structure Prepare Deal Structure

Ensure security is legally enforceable Is credit insurance required for off-taker
Design internal process for deal administration Design document flow to ensure internal
administration can follow the transaction at all times

Implement and Manage Implement and Manage

Review monthly management reports Constant document management to follow
Constant review of client cash flows lifecycle of the trade.
Regular ratio analysis
Private and Confidential
 our edge

1 2 3

Strict due diligence We focus on close relationships with our Many years trade
of all clients, their industry and borrowers to ensure we have complete experience both globally and
the countries involved. knowledge of their business specifically in emerging
at all times. markets.

4 5 6
Complete control No speculation in the market. Purely Complete transparency
of insurance, logistics and trade orientated with a confirmed price in Trade Finance. We provide
tracking of goods involved in a agreed upfront with end off-taker. full transparency of all deals
transaction. whether performing or not.

Private and Confidential

 market leaders in transparency

The Investor Dashboard is a live feed from our fund register, showing all active deals in the fund. Our commitment
to transparency offers investors the opportunity to evaluate any deal and to hold us accountable.

Private and Confidential

true international reach
 Investment
Committee
At the time the business was sold
(1997) it had sales revenues of
US$800 million and a global
multinational footprint. Paul then
worked in various Executive
positions for Alliance One
PAUL TABERER International Inc. (NYSE), before
relocating to Amsterdam in 2007
(Founder and where he became the COO of CdF
Investment International Group (leaf tobacco
Committee) trade). Paul returned to England in
2013 and currently consults for a
major privately owned leaf tobacco
dealer.

Paul has over 30 years

experience in the commercial
GRAHAM and business sector. After
CLARK graduating from the University
(Investment of Cape Town (South Africa) with
Committee) a Bachelor of Business Science
(Honours) degree, Paul joined
Graham joins Challenger as Chairman with over 30 years of valuable the family leaf tobacco trading
commercial experience. Graham graduated with a Bachelor of business, becoming Chief
Accountancy (Honours) and is a Fellow of the Institute of Chartered
Operating Officer (based in
Accountants in Australia.
England).
Graham worked in various roles within the Lonrho Sugar
Corporation in both Malawi and Swaziland, before moving to South
Africa and joining Illovo Sugar Corporation, where he eventually
became the Group Managing Director between 2009 and 2013.
From 2013-2015, Graham joined the Dangote Sugar Refinery Plc in
Nigeria where he again was the Group Managing Director and was
influential in the growth of the company to where it is now.

Private and Confidential

 Investment
Committee
After completing his Bachelor of
Business Science (Honours) degree at
the Universtiy of Cape Town (South
Africa) in 1982, Charles returned to
his family’s tobacco merchanting
company, Tabex (Pvt) Ltd in
Zimbabwe. He spent 15 years in the
business, the last 5 of which were
spent as Managing Director, until in
1997, the business was sold to Dimon
Zimbabwe where he spent a brief
time as the sales director.
Private and Confidential
Since then, Charles has held
numerous executive and non-
executive positions in southern
African businesses, the likes of
which included Falcon Gold
Zimbabwe Ltd (listed on the
Zimbabwean Stock Exchange)
and Blackstar Group SE (dual
listed on London AIM and
Johannesburg Alt-X). Charles is
currently involved in various
property development and
commodity trading ventures.
Charles resides in Zimbabwe.
CHARLES
TABERER
(Founder and
Investment
Committee)
GARY
ISBISTER
(Founder and
Investment Committee)
After qualifying as a Chartered
Account in February 2008,
Gary relocated to London
(England) where he took up an
internal consulting role for In June 2013, Gary moved to
BNP Paribas Securities Riparian as Chief Operating Officer
Services where he focused on and Investment Advisor to its largest
streamlining the internal client, Barak Fund Management.
operations of their outsourced Over his two years there, Gary was
instrumental in the growth of the
fund management platform.
trade finance fund which
He returned to Johannesburg
quadrupled in size during his tenor.
(South Africa) in late 2009 and During his time there he
took up a deal origination role implemented the building blocks
at Blue Strata Trading, a credit evaluation process, assisted
cutting edge South African with capital raising, and structured
import and working capital and advised on $60 million worth of
specialist (now a wholly transactions.
owned Investec subsidiary).
 don’t count your
chickens before
they hatch
rethinking wealth creation

Private and Confidential

 deals trade finance

Private and Confidential

 118
$75k $1.5m
days
Average Transaction Size Average Facility Size Average Deal Tenor

$45m 42 37

Portfolio Size Number of active clients Number of investors

Private and Confidential

Private and Confidential

15%

Meet Justin
Tobacco Merchant in Zimbabwe

our opportunity
Tobacco is packed and delivered to a secure
warehouse in Durban, South Africa. This tobacco is in
conjunction to a pre specified order from the
Indonesian company.

AREA ZIMBABWE | INDONESIA OFF-TAKER CIGARETTE MANUFACTURER

Private and Confidential

JURISDICTION CLIENT OFF TAKER SECURITY

Zimbabwe Privately owned Cigarette Ownership under

sale and repurchase
Indonesia
tobacco Manufacturer in agreement
Indonesia
merchant
Cession of Debtors

Noted as loss payee

under insurance
NET RETURN DEAL TENOR LOANTOVALUE policies

Warehouse
certificate in favor
180 days 90% of Challenger
15% From bill of
Of lading cost value
date
(USD) per Annum

financing structure
Tobacco is packed and delivered to a secure warehouse in Durban, South Africa. This tobacco is only
financed on presentation of a pre specified order from the Indonesian off-taker. The warehouse
company will only release order on receipt of the proof of order against the supplier invoice. Challenger
takes ownership of these goods through the sale and repurchase agreement. Goods are shipped to
Indonesia under marine insurance with Challenger as noted loss payee. Payment is then made directly
to Challenger. Upon receipt of the funds, Challenger retains its capital and interest und releases the
surplus proceeds to the Merchant.
 15%

Meet Jonathan
A fresh produce farmer in South Africa

our opportunity
A reputable South African trading company that buys
fruit and vegetables from local farmers and sells this
fruit directly to European distributors and
supermarkets. Challenger discounts the invoices upon
delivery of the goods to the final Off-Taker.

AREA SOUTH AFRICA | UK and EUROPE OFF-TAKER EUROPEAN SUPERMARKETS

Private and Confidential

 JURISDICTION CLIENT OFF TAKER SECURITY

South Africa Privately owned Various UK and Ownership of

Europe European receivables
fruit and
UK distributors and
vegetable supermarkets
trader Shareholders’
personal guarantee

LOAN TO VALUE Cession of credit

NET RETURN DEAL TENOR insurance policy

30 to 45 75%
14% days of
invoice value

(USD) per Annum

financing structure
This is structured under an invoice discounting agreement with credit insurance over the end Off-Takers.
Goods are shipped and client is invoiced. Payment of these invoices are at 75% by Challenger to fruit co.
European offtakers pay 45 days later into collection account. Surplus paid to fruit co. Capital and interest retained
by Challenger.

Private and Confidential

 16%

Meet Jack
A clothing distributer in China

our opportunity
Hong Kong based company which has contracts to
deliver clothing to a large retailer in the USA.

AREA CHINA | USA OFF-TAKER USA RETAILER

Private and Confidential

 JURISDICTION CLIENT OFF TAKER SECURITY

USA Newly formed Listed United Proceeds paid into

China Hong King States collection account
South Africa subsidiary Retailer
of South African Co. Cession over
debtors

LOAN TO VALUE Guarantee from

NET RETURN DEAL TENOR Shareholders and
Directors

60 days 80%
16% per Transaction of supplier
invoice

(USD) per Annum

financing structure
The Off-Taker in the USA places order for new clothing lines on the Client. Challenger will pay the Client’s
supplier’s for the clothing once it has been delivered to the Off-Taker’s distribution center in Hong Kong. The
following documents need to be supplied to Challenger prior to the payment being released: Supplier invoice,
Quality Certificate, Invoice to USA co. 60 Days after shipping the Off-Taker pays the invoices directly into a
collection account which Challenger has joint control over. Challenger and the Client firstly release all capital and
interest owing to Challenger for its participation in the trade. The remainder of the proceeds are then released to
the Client.

Private and Confidential

 17%

Meet Lucy
A cosmetic product importer in South Africa

our opportunity
International fast moving, private label cosmetic items
to be imported into South Africa for leading national
retail pharmacy groups.

AREA SOUTH AFRICA | CHINA | POLAND OFF-TAKER LEADING RETAIL PHARMACY GROUPS

Private and Confidential

 JURISDICTION CLIENT OFF TAKER SECURITY

South Africa Cosmetics Trader Leading Ownership of stock

China Retail pharmacy under sale and
Poland repo agreement
Groups in South
Africa
Cession of debtors
and Control and
cession of bank
LOAN TO VALUE accounts
NET RETURN DEAL TENOR

CMA with logistics

120 days 80% and warehouse
from statement of supplier partner
17%
invoice
Cession of shares
(USD) per Annum

financing structure
The Client enters into a sale and repurchase agreement, converting into an invoice discounting facility. Challenger pays
the relevant supplier against presentation of their invoice once it has been matched against a signed off-take agreement
in the relevant country. Challenger then tracks the goods, including transport, insurance and any duty payments to
ensure that the trade is completed successfully. The products are owned by Challenger under a sale and repurchase
agreement prior to delivery to the final Off-Taker. When the goods are delivered to final Off-Taker, the funding is
converted into an invoice discounting agreement and Challenger takes ownership of those relevant debtors. Payment is
then paid into a shared collection account. Challenger then releases the Client’s profits after it has been repaid its capital
and interest. Challenger has also negotiated a 9% equity carry for investors.

Private and Confidential

 contact information

South Africa Alpha Capital Management Limited

69 Front Street. Hamilton. Bermuda. HM12

Challenger Management Limited

Level 12. Tower 1. Nexterracom Towers. Cybercity. Ebene. Mauritius

paul taberer gary isbister

pault@challenger garyi@challengerml. info@sa-alpha.com
ml.com com www.challengerml.com
+44 7500 847003 +27 72 359 4404

Private and Confidential

 disclaimer
I n v e s t m e n t i n t h e S e g r e g a t e d P o r t f o l i o c a r r i e s a h i g h d e g r e e o f r i s k i n c l u d i n g , b u t n o t l i m i t e d t o , t h e
r i s k s d e s c r i b e d i n t h i s d i s c l a i m e r . N o a s s u r a n c e c a n b e g i v e n t h a t t h e i n v e s t o r s w i l l r e a l i s e a p r o f i t o n
t h e i r i n v e s t m e n t . M o r e o v e r , i n v e s t o r s m a y l o s e s o m e o r a l l o f t h e i r i n v e s t m e n t . T h e r i s k s r e f e r r e d t o i n
t h i s d i s c l a i m e r a r e n o t e x h a u s t i v e . T h e y r e l a t e t o i n v e s t m e n t i n t h e S e g r e g a t e d P o r t f o l i o , t h e i n v e s t m e n t
a c t i v i t i e s o f t h e S e g r e g a t e d P o r t f o l i o a n d t h e u n d e r l y i n g f u n d s a n d i n v e s t m e n t s i n w h i c h t h e S e g r e g a t e d
P o r t f o l i o m a y i n v e s t o r t o w h i c h t h e S e g r e g a t e d P o r t f o l i o m a y b e e x p o s e d . T h e i n f o r m a t i o n h e r e i n d o e s
n o t c o n s e q u e n t l y c o n s t i t u t e a n o f f e r , o r a n i n v i t a t i o n t o p u r c h a s e s h a r e s a t t r i b u t a b l e t o t h e S e g r e g a t e d
P o r t f o l i o , n o r d o e s t h e i n f o r m a t i o n h e r e i n c o n s t i t u t e a r e c o m m e n d a t i o n t o e n t e r i n t o a n y t r a n s a c t i o n i n
r e l a t i o n t o t h e S e g r e g a t e d P o r t f o l i o .
Y o u a r e p r i v y t o t h i s i n f o r m a t i o n i n o u r c a p a c i t y a s a p o t e n t i a l c o u n t e r p a r t y a c t i n g a t a r m ’ s l e n g t h . W e
a r e n o t a c t i n g a s y o u r f i n a n c i a l a d v i s e r o r i n a f i d u c i a r y c a p a c i t y i n r e s p e c t o f a n y i n v e s t m e n t b y y o u i n
t h e S e g r e g a t e d P o r t f o l i o o r a n y o t h e r t r a n s a c t i o n w i t h y o u u n l e s s o t h e r w i s e e x p r e s s l y a g r e e d b y u s i n
w r i t i n g . P o t e n t i a l i n v e s t o r s s h o u l d r e v i e w t h e P r i v a t e P l a c e m e n t M e m o r a n d u m o f S o u t h A f r i c a A l p h a S P C
a l o n g w i t h t h e E x p l a n a t o r y A p p e n d i x o f t h e S e g r e g a t e d P o r t f o l i o c a r e f u l l y a n d i n i t s e n t i r e t y a n d c o n s u l t
w i t h t h e i r p r o f e s s i o n a l a d v i s o r s b e f o r e m a k i n g a n a p p l i c a t i o n f o r s h a r e s a t t r i b u t a b l e t o t h e S e g r e g a t e d
P o r t f o l i o .

T h e S e g r e g a t e d P o r t f o l i o ’ s p a s t i n v e s t m e n t p e r f o r m a n c e m a y n o t b e c o n s t r u e d a s a n i n d i c a t i o n o f t h e
f u t u r e r e s u l t s o f a n i n v e s t m e n t i n t h e S e g r e g a t e d P o r t f o l i o . I n v e s t m e n t s i n t h e S e g r e g a t e d P o r t f o l i o a r e
g e n e r a l l y m e d i u m t o l o n g t e r m i n v e s t m e n t s . T h e v a l u e o f s h a r e s a t t r i b u t a b l e t o t h e S e g r e g a t e d P o r t f o l i o
m a y g o d o w n a s w e l l a s u p a n d p a s t p e r f o r m a n c e i s n o t n e c e s s a r i l y a g u i d e t o f u t u r e p e r f o r m a n c e .
I n v e s t m e n t s a r e t r a d e d a t r u l i n g p r i c e s a n d c a n e n g a g e i n s c r i p l e n d i n g .

F o r w a r d p r i c i n g i s u s e d . C o m m i s s i o n a n d i n c e n t i v e s m a y b e p a i d a n d i f s o , a r e i n c l u d e d i n t h e o v e r a l l
c o s t . F l u c t u a t i o n o r m o v e m e n t s i n e x c h a n g e r a t e s m a y c a u s e t h e v a l u e o f t h e u n d e r l y i n g i n v e s t m e n t s t o g o
u p o r d o w n . S h a r e p r i c e s a r e c a l c u l a t e d o n a n e t a s s e t v a l u e b a s i s a n d b r o k e r a g e , m a r k e t a b l e s e c u r i t i e s ,
t a x , a u d i t o r ’ s f e e s , a m o n g s t o t h e r s , m a y b e l e v i e d a g a i n s t t h e S e g r e g a t e d P o r t f o l i o . R e f e r e n c e s t o t h e
S e g r e g a t e d P o r t f o l i o i n t h i s d o c u m e n t s h a l l , w h e r e t h e c o n t e x t r e q u i r e s , b e d e e m e d t o r e f e r t o S o u t h
A f r i c a A l p h a S P C o n b e h a l f o f a n d f o r t h e a c c o u n t o f t h e S e g r e g a t e d P o r t f o l i o .
 disclaimer – swiss investors
I n S w i t z e r l a n d , t h e F u n d i s c o n s i d e r e d f o r e i g n i n v e s t m e n t s c h e m e s p u r s u a n t t o A r t . 1 1 9 o f t h e S w i s s
F e d e r a l C o l l e c t i v e I n v e s t m e n t S c h e m e s A c t ( C I S A ) . N o a p p l i c a t i o n h a s b e e n s u b m i t t e d t o t h e F e d e r a l
F i n a n c i a l M a r k e t S u p e r v i s o r y A u t h o r i t y ( F I N M A ) t o o b t a i n a p p r o v a l w i t h i n t h e m e a n i n g o f A r t . 1 2 0 C I S A t o
o f f e r o r d i s t r i b u t e t h e i n v e s t m e n t i n o r f r o m S w i t z e r l a n d t o “ N o n - Q u a l i f i e d I n v e s t o r s ” , a n d n o o t h e r s t e p s
h a v e b e e n t a k e n i n t h i s d i r e c t i o n . C o n s e q u e n t l y , i n v e s t o r s d o n o t b e n e f i t f r o m t h e s p e c i f i c i n v e s t o r
p r o t e c t i o n a n d / o r F I N M A s u p e r v i s i o n p u r s u a n t t o t h e C I S A a n d i t s i m p l e m e n t i n g o r d i n a n c e s .

A n y o f f e r o r s a l e m u s t t h e r e f o r e b e i n s t r i c t c o m p l i a
p r o v i s i o n s o f t h e C o l l e c t i v e I n v e s t m e n t S c h e m e s A c t a n d
2 0 1 3 / 9 o n d i s t r i b u t i o n o f c o l l e c t i v e i n v e s t m e n t s c h e m e s .
t h e S h a r e s o r d i s t r i b u t e a n y F u n d D o c u m e n t a t i o n , i n c l u d
a n d a n n u a l r e p o r t s i s s u e d b y t h e F u n d f r o m t i m e t o t i m e
o r f r o m S w i t z e r l a n d o t h e r t h a n t o " Q u a l i f i e d I n v e s t o r s " ,
6 a n d 6 a o f t h e C I S O a n d a n y c i r c u l a r s i s s u e d b y F I N M A .
n c e w i t h S w i s s l a w , a n d i n p a r t i c u l a r w i t h t h e
i t s i m p l e m e n t i n g o r d i n a n c e s , a n d F I N M A c i r c u l a r
N o p e r s o n o r e n t i t y i s a u t h o r i z e d t o o f f e r o r s e l l
i n g t h e P r o s p e c t u s , t h e A r t i c l e s o f I n c o r p o r a t i o n
o r p r o m o t i o n a l m a t e r i a l p e r t a i n i n g t o t h e F u n d i n
a s d e f i n e d i n A r t i c l e 1 0 o f t h e C I S A a n d A r t i c l e s

T h e F u n d h a s a p p o i
L a u s a n n e , S w i t z e r l a
B a n q u e C a n t o n a l e d
R e p r e s e n t a t i v e i n L
p e r f o r m a n c e a n d j u r
n t e d a s S w i s s R e p r e s e n t a t i v e O l i g o S w i s s F u n d S e r v i c e s S A , A v . V i l l a m o n t 1 7 , 1 0 0 5
n d , T e l : + 4 1 2 1 3 1 1 1 7 7 7 , e m a i l : i n f o @ o l i g o f u n d s . c h . T h e F u n d ’ s p a y i n g a g e n t i s
e G e n è v e . A n y F u n d D o c u m e n t a t i o n m a y b e o b t a i n e d f r e e o f c h a r g e f r o m t h e S w i s s
a u s a n n e . I n r e s p e c t o f t h e S h a r e s d i s t r i b u t e d i n o r f r o m S w i t z e r l a n d , t h e p l a c e o f
i s d i c t i o n i s a t t h e r e g i s t e r e d o f f i c e o f t h e S w i s s R e p r e s e n t a t i v e .