
how south africans can make their offshore cash work harder
02 September 2025While UK fixed deposits erode wealth post-tax, Westbrooke’s Yield Plus fund offers stable, inflation-beating returns of 7% to 8% annually in pound sterling (pre-tax).
With South Africa’s economy representing less than 1% of global market capitalisation, the rand having depreciated at an average of 5% annually against the US dollar over the last 10 years, and significant local investment risk, there is now a well-established trend of South Africans diversifying their wealth offshore.
However, once externalised, many are parking this cash in low-yielding interest-bearing investments, such as UK six-month fixed deposits, which yield just 1.8% post-tax after an up-to-45% tax hit for South African taxpayers. UK inflation, in comparison, currently sits at 3.8% per annum, meaning that many South African investors are getting poorer in real terms.
Due to relaxed exchange controls, individuals can send up to R11 million offshore annually through the single discretionary allowance (R1 million) and foreign investment allowance (R10 million).
Westbrooke Alternative Asset Management – a global alternative investment firm with a 20-year track record and a presence in South Africa, the UK and the US – is focused on providing South Africans access to higher-yielding, tax-efficient alternatives to these investments.
“South Africans are externalising significant sums, but low-yielding deposits are not keeping pace with inflation or currency depreciation,” says Dino Zuccollo, a director at Westbrooke.
“Alternative investments like private debt can offer higher returns without compromising capital preservation, making it a compelling option for those seeking to protect their offshore wealth.”
Private debt emerged as one of the fastest-growing alternative asset classes globally after the 2008 global financial crisis. Increased regulation and red tape led traditional banks to withdraw from some segments of the lending market. Private lenders quickly filled this gap by providing more flexible funding solutions to borrowers, for smaller amounts and at speed.
For example, Westbrooke’s Yield Plus fund manages a diversified portfolio of approximately 40 UK-based, property-backed loans, benefiting from senior security and a conservative 56% loan-to-value ratio. The offering has a seven-plus-year track record of success and currently generates annual British pound sterling (BPS) returns of 7% to 8%.
The fund has also been designed to be tax-efficient for South African investors, converting interest income to an offshore dividend, which is typically taxed at a rate of 20% for South Africans. The latest fund return, therefore, comes in at ~6% per annum post-tax for South African investors – three times higher than the 1.8% post-tax yield of UK six-month fixed deposits.
“This tax structure significantly enhances post-tax returns, making the offering particularly attractive for South African-based high-net-worth individuals and wealth managers,” Zuccollo explains.
With South Africa’s economic growth lagging (0.6% GDP growth in Q4 2024) and political risks prompting diversification, Westbrooke’s approach aligns with investors’ needs to protect and grow their wealth in hard currency.
Another key advantage of private debt is the stability of returns and the lack of correlation to more traditional options. Unlike listed markets, private debt avoids the volatility of public exchanges, where returns often move with reference to external factors which have little to no bearing on the fundamentals of the investment itself.
The UK is a natural choice for South Africans, given its historical ties and familiarity with the market. Westbrooke believes that it is essential to have an on-the-ground team to deeply understand the market and closely track investments. The London office now operates through 15 investment professionals, focusing on underserved loan segments (£10 million to £20 million) that banks often overlook due to regulatory constraints. This niche allows for better pricing without necessarily more risk, appealing to investors looking to capture returns beyond the benchmark.
Flexible investment options – a minimum of £25 000 (R597 000) via platforms or £100 000 (R2.4 million) directly, with no lock-in periods and six- or 12-month redemption notice periods – further enhance accessibility.
Zuccollo adds, “Alternatives offer an appealing way to achieve global diversification without sacrificing returns or security. The problem is access – the global mega-managers aren’t available to the wider investment public. This is the problem which Westbrooke is working hard to solve.”
The deadline for quarter three investment in Westbrooke Yield Plus is 23 September 2025.
Westbrooke Yield Plus is marketed in South Africa under a CIPC-approved prospectus. Westbrooke Alternative Asset Management is an authorised Financial Services Provider.