UCT Evergreen Fund
The Evergreen fund is aimed at maturing opportunities in the pre-commercial or commercial phase of a project’s life and the funding plays a critical role in successfully transferring research outputs in order to achieve impact. It is not operated as a separate legal entity to UCT, so any equity received in return for investment, will be held by UCT.
Amounts of up to R6m can be invested in a UCT spin-off company and often this investment is further leveraged through other local and foreign government programs and/or external co-investors. The investment is typically made in return for equity, although interest-bearing loans are also possible; the key is that a return is required.
How the Fund was Established
Council approved the use of a donation made by Mr Richard Sonnenberg in 1987 for technology transfer activities, as the nucleus to initiate a self-sustaining (“evergreen”) fund that was contributed to by other donors.
The University's Council approved the use of a donation made by Mr Richard Sonnenberg in 1987 for technology transfer activities, as the nucleus to initiate a self-sustaining (“evergreen”) fund that became known the Evergreen Fund. Following outreach to our alumni, other donations were received from several individuals.
UCT invites Companies and Donors to contribute to growing the Evergreen Seed Fund. Donors can take pride in the difference their contribution will make and be assured that all returns from investments made, will be retained by the Fund to invest in further projects. Supporting this initiative, contributors have an opportunity to be an integral part of Innovation at UCT and know that they are strengthening and building the South African economy through innovation and by creating start-up companies and employment opportunities for UCT staff and students.
If you would like to participate in the Alumni & Friends Innovation Network, or be kept informed of developments, please download and return the “Alumni and Donors’ Response Form” (right-hand panel above).
The fund was significantly activated by the Council decision permitting the investment of a portion of UCT investments in private equity in the form of UCT spin-off companies. This injected around R60m into the fund in 2017 and facilitated five investments by the end of 2018 amounting to R34.2m. Amounts of up to R6m can be invested in a UCT spin-off company and often this investment is further leveraged through other local and foreign government programs and/or external co-investors. Typically, the investment is made in return for equity, although interest-bearing loans are also possible; the key is that a return is required. A further R9m was allocated to the Fund in 2019.
Investment Decisions and Governance
In terms of the governance model for the Evergreen Investment Fund, the investment decision lies with the University’s Intellectual Property Advisory Committee (IPAC), as delegated by University Council. IPAC has invited professionals with aligned backgrounds to constitute an advisory committee, the Private Equity Advisory Group (PAG), which has its own terms of reference. PAG provides independent strategic advice to IPAC on investments. PAG committee members’ experience cover the financial sector, legal and socio-economic investment.
The members of PAG are Mr Chris Derksen (Chair), Mr Gasant Orrie, Mr Guy Harris, Mr AJ Nel and Mr Ashley Francis, UCT Executive Director Finance. UCT appreciates the valuable time that these external PAG members provide voluntarily to support this initiative.
The work-flow and decision-making process is detailed in the Guideline and Investment process, which can be downloaded from the panel on the right.
PAG evaluate capital decisions using the following six criteria:
- Alignment with the goals of UCT: “to Promote research and incentivise researchers with the potential to make a commercially sustainable positive impact on South Africa and beyond by commercialising patents and “know-how” developed within the University”.
- Commercial viability of the product
- Ability to raise other funding and future funding needs
- Company management
- Alignment of other investors and shareholders with UCT’s interests and policies
- Risk vs. Return