Category Investments

Sanlam Investments launches sustainable infrastructure fund

02 September 2021 Sanlam Investments
Ockert Doyer

Ockert Doyer

Pawan Singh

Pawan Singh

Sanlam Investments’ mission to become Africa’s premier sustainable and impact investor was accelerated today with the launch of the Sanlam Investments Sustainable Infrastructure Fund. The fund, which has launched with commitments of R500-million, plans to invest in local 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 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 of its own capital alongside the fund into projects that drive infrastructure development.

Paul Hanratty, CEO Sanlam Group, “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 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.”

Pawan Singh, Head of Multi-Strategy, Alternative Investments 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.”

He said 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). “So, 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. The fund will track these development outcomes over time so investors can see the deliberate financial and social impact on the economy and its people, from their capital commitment.”

Sanlam has a deep understanding, experience and skill set when it comes to the asset class and an extensive deal origination capability. Singh explains investors will benefit from the asset manager’s experience, access to deal flow and asset management expertise in the local infrastructure market. “Sanlam has already invested over R6-billion of our own capital in South African infrastructure assets, over more than 25 projects and we are aiming to double our allocation to local infrastructure over the next two to three years.”

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.

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