African Infrastructure Investment Managers (AIIM) has successfully completed a capital increase of $373,1 million (R5,5 billion) for the clean energy investment-focused IDEAS Managed Fund (IDEAS).
AIIM is one of Africa’s largest infrastructure-focused private equity fund managers and IDEAS is its flagship SADC infrastructure fund with a major focus on clean energy project financing. The $272,1m (R5,5bn) fundraise exceeds the initial $373,1m (R4,5bn) target by 20%, taking the size of the open-ended fund to more than $1,49bn (R22bn).
IDEAS will deploy the capital in line with the fund’s existing mandate, providing investors with exposure to a diversified portfolio of sustainable infrastructure assets across the SADC region. The current fundraising effort has been concluded to support the deployment of an active pipeline of assets across the power, digital infrastructure and transport sectors over the next three years, underpinned by long-term economic and environmental sustainability goals.
Historically, IDEAS has primarily targeted opportunities in the renewable energy space with a 75% allocation to investments in the sector. These investments contribute around 25% of the clean energy supplied to South Africa’s grid, offsetting 3.7 million tons CO2 equivalent in 2020 and powering the equivalent of 1.1 million households with clean energy. This has positioned AIIM and IDEAS as key players in South Africa’s clean energy transition and aligns to global support for climate change mitigation strategies.
IDEAS has invested in a diversified portfolio of more than 40 assets involved in the delivery of key services in the transport, power, digital and social infrastructure sectors. This approach has proven successful to date, with IDEAS consistently outperforming the target returns of CPI+7% since inception in 1999.
Commenting on the success of the fundraise, AIIM co-Managing Director Vuyo Ntoi: “The strong support from existing and new investors is indicative of investors’ confidence in AIIM and IDEAS’ investment mandate. The market has reached an inflection point with public policy support catalysing healthy deal flow and increasing private sector investor appetite. We are very pleased by the trust placed in us by the growing investor base and look forward to partnering with our investors to deliver long-term infrastructure for South Africa and the region.”
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The new commitments were secured from 19 key South African institutional and pension fund investors, with two thirds of the capital being committed by new investors to the fund. The investor appetite capitalised on recent interest in the alternative assets and expected amendments to Regulation 28 of the Pension Funds Act to support an increased allocation to infrastructure assets from the South African pension industry. This is supported by the recognition of infrastructure as a key asset class in the delivery of impact across an investment portfolio. AIIM’s well-established ESG and impact management systems are fully integrated into the investment process providing investors with a tangible contribution to the UN Sustainable Development Goals and South Africa’s development goals more broadly.
AIIM’s SADC Chief Investment Officer, Sean Friend: “The pandemic has reinforced the strength of infrastructure as an attractive long-term asset class in the face of market volatility. All our portfolio assets remained operational during this period, resulting in strong performance and being able to outperform most other asset classes. In addition to delivering compelling risk-adjusted returns, the portfolio supported more than 4,000 direct jobs throughout the pandemic and we are pleased to have been able to play a part in South Africa’s long-term economic recovery and ongoing development.”