Sanlam Investments Sustainable Infrastructure Fund

Sanlam Investments launches sustainable infrastructure fund

Sanlam Investments’ mission to become Africa’s premier sustainable investor was accelerated this month with the launch of the Sanlam Investments Sustainable Infrastructure Fund. The fund will invest in South African infrastructure projects that drive economic growth, market development and job growth, with an emphasis on environmental sustainability. It aims to deliver stable, inflation-beating returns to investors over the long term via an easy-to-access fund structure.

This fund has the potential to have a deep impact on the economy

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 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.’

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 has committed R6 billion

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 has a compelling investment case

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 cashflows and capital protection to retirement funds and larger corporate investors while making a positive impact for our country and our people.’

Aligned with the UN’s Sustainable Development Goals

Singh says the strategy is aligned with six of the United Nations Sustainable Development Goals, including:

• affordable and clean energy (goal 7);
• decent work and economic growth (goal 8); and
• sustainable cities and communities (goal 11).

‘At the same time as providing finance to infrastructure projects that deliver solid financial outcomes, we are able to support sustainable economic growth and market development.’

Sanlam Investments has a deep understanding of the asset class and an extensive deal origination capability. Investors will benefit from the asset manager’s experience, access to deal flow and asset management expertise in the local infrastructure market. Sanlam Group has already invested R6 billion of its own capital in South African infrastructure assets, over more than 25 projects and aims to double its allocation to local infrastructure over the next two to three years.

Amendments to Regulation 28 will allow critically needed infrastructure allocation

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.

Infrastructure is going to play a critical role to spur the growth of our economy. We’re investing not only for our current generation but intently for future generations.