OMAN venture launches infrastructure fund for investment in SA infrastructure projects

african infrastructure investment managers (aiim), a joint venture between macquarie bank of australia and old mutual asset managers (omam), have announced the establishment and first closing of their second private infrastructure fund.

unveiling the details of the fund on wednesday, omam said their african infrastructure investment fund (aiif) had raised r675 million from a range of leading south african institutional investors, with plans to raise additional funds over the coming six months.

it will invest predominantly in south african infrastructure projects, including roads, airports, power, telecommunications, rail, ports, water and social infrastructure.

old mutual life assurance company (south africa) limited and standard corporate and merchant bank (scmb) are the cornerstone investors in aiif.

other investors at the first closing include metropolitan life limited, eskom pension and provident fund and stanlib asset management limited.

the fund is a 15-year closed end fund and is seeking to raise additional commitments from prospective investors by mid-2004, which will provide african institutional investors with diversified exposure to local infrastructure assets.

aiim, the joint venture between macquarie and omam, will manage the fund and is staffed by executives with expertise in infrastructure asset management.

over the past four years, aiim has successfully managed the south africa infrastructure fund (saif). saif was the first private infrastructure equity fund in southern africa and was supported by most of the pre-eminent investors in the south african market.

by late 2003 aiim fully committed saif to a range of infrastructure investments. during this period, aiim has positioned itself as the leading infrastructure equity investor in the african market, and is experiencing significant deal-flow, making the establishment of aiif attractive to institutional investors.

aiim managing director gavin kerr said aiif has received substantial support from african investors and is now in a position to invest in infrastructure assets across africa, predominantly in south africa.

"through saif, aiim currently manages approximately 1.0 billion rand in infrastructure equity, making it the largest specialised private infrastructure equity investor in africa. aiif will follow on from saif, as the second specialised infrastructure equity fund in south africa established by the private sector. aiif provides domestic investors with an opportunity to benefit from the unique characteristics of this asset class whilst investing in a range of infrastructure projects which will make a significant contribution
to regional infrastructure and economic development.

"infrastructure investment represents stable and long term growth for south african investors," kerr continued. "there are a number of exciting projects in various stages of development in south africa and the rest of africa, including a number of privately funded toll road, power, port and airport projects. we anticipate that a growing proportion of south africa's infrastructure expenditure will be privately financed over the next 10 years. as a result we anticipate significant interest in investing
in the fund."

omam executive director derrick msibi commented: "we believe that the climate is ripe for investment in infrastructure in south africa with the public sector now targeting infrastructure as a key area for future investment attention. our partnership with macquarie combines our local knowledge and expertise with their unrivalled global track record in infrastructure development and together we are well placed to effectively channel funds into this investment sector."

added david munro, deputy managing director of scmb: "the standard bank group is strongly supportive of infrastructure and its role in the economic development of africa. the financial services charter focuses on investment in infrastructure as a means of supporting economic growth and social upliftment, and our investment in aiif is a positive move in supporting this goal. our ongoing involvement in aiif will enhance our ability to deliver on our commitments under the charter and be a positive catalyst in the financing of bee in future infrastructure investments."

"we believe that infrastructure provides the impetus necessary to drive economic growth in south africa and in the broader southern african region," noted roddy sparks, managing director of old mutual south africa.

"in addition to contributing to community upliftment in this way, infrastructure acts as a diversifier in our portfolios, and our investments in this area in the past have resulted in good returns for our policyholder funds."