Leading South African asset manager, Sanlam Investments, this week launched its Sustainable Infrastructure Fund (SIF) which will target investments in sustainable infrastructure projects including renewable energy.
Sanlam Investments says its fund will deliver stable, inflation-beating returns to investors over the long term via an easy-to-access fund structure.
Ockert Doyer, the fund’s lead portfolio manager commented saying; “capital investment into South African infrastructure projects is vital for recovery and a 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 deep impact on the economy.”
South Africa’s National Treasury’s proposed amendments to Regulation 28 of the Pension Funds Act will allow local retirement funds to significantly increase their total infrastructure allocation. These concessions will deliver a flow of much needed private sector capital to support the government’s infrastructure goals.
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 can increase economic capacity and high forward linkages to the wider economy for future generations.
Sanlam Group investing R6 billion into the fund
Sanlam Investments is aiming to attract R5 billion from institutional investors in the Sustainable Infrastructure Fund, with over R500 million already having been committed. In addition, over the next two to three years, the Sanlam Group expects to invest a further R6 billion of its own capital alongside the fund into projects that drive infrastructure development in South Africa.
The fund, which will provide predominantly debt finance to projects, will target CPI plus 4.5% per annum and be accessible for a minimum investment of R25 million. Investments will be made in renewable energy, conventional energy, housing, transportation, communication, health, and water and waste-related assets.
Pawan Singh, head of Multi-Strategy at Sanlam’s Alternative Investments unit, will manage the fund alongside Doyer. “With enduring volatility of equity markets, we can deliver diversification, stable cash flows and capital protection to retirement funds and larger corporate investors while making a positive impact for our country and our people.”
Singh says the strategy is aligned with six of the United Nations Sustainable Development Goals including; affordable and clean energy, decent work and economic growth and sustainable cities and communities.