IAM appointed to run $670m Emerging Africa Infrastructure Fund

By Janice Roberts

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Investec Asset Management announced today that it has been appointed to manage the approximately US$670 million Emerging Africa Infrastructure Fund (“EAIF” or “the Fund”), a public-private partnership anchored by the governments of the United Kingdom, The Netherlands, Sweden and Switzerland.

This follows a competitive tender process that brought interest from over 30 companies globally.

This announcement further deepens Investec Asset Management’s pan-African investment expertise and follows the recent launch of the Growthpoint Investec African Properties platform to invest in pan-Africa real estate, and the recent closure of its second Africa private equity fund.

EAIF is an initiative of the donor-financed Private Infrastructure Development Group and was developed to mobilise capital into private sector infrastructure projects across sub-Saharan Africa. Established in 2002, the Fund has committed over US$1.2 billion to 63 projects in 19 countries.

In addition to the equity provided by the UK, The Netherlands, Sweden and Switzerland, lenders includes a combination of private sector financial institutions and development finance institutions.

Hendrik du Toit, CEO, Investec Asset Management, explains: “The private sector has a crucial role to play in unlocking the conditions for the sustainable, long-term development of Africa’s infrastructure. A major initiative of its kind globally, this fund aims to provide growth capital, expertise and support to these projects with the aim of stimulating economic development, encouraging growth and employment, and fuelling Africa’s long-term development.”

David White, Chair of EAIF, says the Fund has established itself as a market leader in infrastructure finance in Africa and is now ready to be a bigger and more potent force in the economic development of sub-Saharan Africa.

Commenting on IAM’s appointment, Mr White said: “We were impressed with Investec Asset Management’s determination and agility, its commitment to our core mission and its belief in a successful future for Africa. Their appointment as the Fund’s manager means that we now have the final element in place to power our growth strategy. Africa is Investec Asset Management’s home territory. From African roots it has built a worldwide business and a demonstrable track record as a good corporate citizen.

“The people responsible for EAIF’s recent success will continue their outstanding work at Investec Asset Management, which is inheriting a team that is greatly respected, deeply knowledgeable and uniquely skilled.”

As one of the largest third party investors in private equity, credit, public equity and sovereign debt across the African continent, Investec Asset Management will integrate the Fund and its existing team into its African investment platform which includes over 73 Africa-focused investment professionals. Of its total US$109 billion AUM, the firm manages investments in Africa (including South Africa) of US$30 billion*.

The Fund aims to achieve three main objectives – to catalyse African infrastructure projects through providing long-term debt and mezzanine finance on commercial terms tailored to local needs; to invest in sustainable businesses with skilled management teams and clear potential to improve economies and help reduce poverty; and to deliver on both investment and specific development goals.

Nazmeera Moola, Co-Head of Africa Fixed Income at Investec Asset Management, who will head EAIF operations, adds: “The large demand for funding on the continent and the necessity for effective infrastructure development provides a strong investment backdrop. This offers a compelling entry point into the long-term African growth story. We are very well positioned to take advantage of these opportunities with our extensive experience of investing in emerging markets, underpinned by our heritage, which gives us deep insight into the drivers of African markets.”

Investec Asset Management will manage the entire process from seeking out projects, evaluating loan applications, carrying out due diligence and managing the administration of transactions. Investec Asset Management will also market the Fund internationally and monitor the loan portfolio.

Launched in South Africa in 1991, Investec Asset Management is one of the first asset management firms to build a global franchise from emerging market origins offering a broad range of Africa-specific investment strategies.

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