With its untapped growth potential and positive demographics, Africa has long been considered an appealing investment destination. In particular, the demand for sustainable infrastructure development has received increasing attention in recent times, due to the considerable infrastructure funding gap in the region.
Leveraging this opportunity, Sanlam together with Africa Infrastructure Securities (InfraSec) recently collaborated in a strategic joint venture to unlock the investment potential Africa holds. Together they have launched the new Sanlam InfraSec Infrastructure Fund, a US$-denominated fund, to be managed via a Joint Venture company set up and owned by Sanlam and InfraSec. The proposed fund itself will be domiciled in Ireland, benefitting both from Ireland’s various trade and investment agreements with African countries, as well as the ease of enabling inward investment from leading DFI’s and international commercial investors due to its positioning and high governance standards. The fund is to be channelled into infrastructure projects on the African continent with an emphasis on economic growth, social upliftment and energy. The fund will be aimed at leading international commercial and DFI institutional investors.
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According to fund co-founders and executive directors, Kholofelo Molewa and Michael Brooks (co-founder and ex-CEO of Inspired Evolution Investment Management), “Although the appetite for investing in Africa is growing, we are still coming off a very low base relative to infrastructure demands. This will make our fund competitive, whilst leveraging Sanlam and InfraSec’s combined investment expertise, best-of-breed partners and on-the-ground knowledge and relationships in Africa”.
InfraSec identifies appropriate investment opportunities and infrastructure projects across a broad spectrum of technologies, with a special focus on economic infrastructure, such as energy utilities, including renewable energy as well as social infrastructure (eg: affordable housing). Together with Sanlam, their objective is to generate exceptional returns on a risk-adjusted basis by making equity and quasi-equity investments into a well-diversified portfolio of potentially high performing infrastructure equity investments on the African continent.
Says Ben Kodisang, Chief Executive of Sanlam Alternatives, “We are very positive about this strategic venture with InfraSec. We deliberately sought a partner experienced in African-focused infrastructure who has an established local presence to maximise future business growth. Sanlam on the other hand is a respected brand with an equally compelling geographic reach and asset management presence in the region. Together we believe this will enable us access to local infrastructure opportunities”.
“We believe there is a huge amount of organic growth waiting to be unlocked over the medium to long term, along with greater synergies in the relatively untapped space of infrastructure investing in Africa”.