South Africa: Sanlam Investments launches infrastructure fund
The Sanlam Investments Sustainable Infrastructure Fund has launched with commitments of R500 million (about $35 million). The fund plans to invest in South African projects that drive economic growth, market development and job growth, with an emphasis on environmental sustainability. Stable, inflation-beating returns will be delivered to investors over the long term via an easy-to-access fund structure.
Sanlam Investments is aiming to attract R5 billion (about $348 million) investment from institutional investors into the fund. In addition, over the next two to three years, the Sanlam Group expects to invest a further R6 billion (about $418 million) of its own capital alongside the fund into projects that drive infrastructure development.
Paul Hanratty, CEO of Sanlam Group, said: “We recognise that infrastructure is going to play a critical role in spurring the growth of our economy. We’re investing not only for our current generation but also for future generations. The Sanlam Group is mindful of the role we play in directing capital to support the strategically important sectors of our economy. For this reason, we’re supporting our Sanlam Investments Alternatives business in this endeavour.”
The Sustainable Infrastructure Fund, which will provide predominantly debt finance to projects, will target CPI plus 4.5% per annum and be accessible for a minimum R25 million (about $1.7 million) investment. Investments will be made in renewable energy, conventional energy, housing, transportation, communication, health, and water and waste-related assets.
Ockert Doyer, the fund’s lead portfolio manager says, “As our economy continues to struggle, capital investment into South African infrastructure projects is vital for recovery and return to solid growth. Efficient infrastructure brings faster and easier access to markets, healthcare and educational services – the social and economic benefits are undeniable. We believe this new fund has the potential to have a real positive impact on the economy.”
Doyer says in the short term, infrastructure investment can create jobs, stimulate economic activity and improve consumer and business confidence. “Over the longer term, it increases the capacity for economic growth and due to high forward linkages to the wider economy deliver positive outcomes for future generations.”
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