Ninety One SA’s Infrastructure Credit Fund reaches R2bn in assets under management

Ninety One’s South Africa Infrastructure Credit Fund has achieved a significant milestone, reaching over 2 billion rand in assets under management since its inception. The fund, primarily focused on senior debt instruments, is channeling investments into crucial sectors such as renewable energy, water, digital connectivity, and transportation. According to Bashir Omar, a portfolio manager at Ninety One, the fund has not only grown beyond expectations but has become a testament to the robust interest from local institutional investors.

Launched in October 2020, and formally operational from April this year, the fund has been on a trajectory of rapid growth, raising approximately 2.3 billion rand so far. Omar expresses that the fund has exceeded the team’s initial forecasts regarding the pace of growth. “We’ve targeted 5 to 15 billion rand, and the fund’s early success illustrates the profound need for infrastructure investment in South Africa,” he remarked in a recent interview.

The fundamental aim of this fund is not just to provide capital but to actively engage in resolving South Africa’s infrastructure challenges. With local institutional pension funds as major supporters, the fund predominantly attracts domestic investors. South Africa’s government has laid the groundwork, encouraging the investment community to play a pivotal role as public fiscal resources remain constrained.

Omar highlights that the primary appeal for investors is the fund’s vision of fostering economic growth, generating jobs, and, ultimately, improving the quality of life in South Africa. He says, “Many of the pension fund participants want to see a better South Africa. Through investing in this fund, they are not only contributing to economic growth but are investing in the future of the economy.”

However, social empowerment isn’t the sole attraction. The fund also emphasizes the importance of delivering competitive returns to its investors. Designed to outperform cash and CPI, the fund targets returns of cash plus 3.5%. Omar noted, “We’ve structured our fund to provide real returns above cash, giving investors the confidence that they are engaging in responsible investments that do not sacrifice returns.”

This balance of high social impact and solid financial return has been a key factor in maintaining investor confidence. The fund has committed to providing liquidity options, addressing a critical need among pension fund members as their demands can fluctuate over time. “Liquidity has been a significant consideration,” Omar asserts, adding that the portfolio’s flexibility to encompass both listed and unlisted investments is instrumental.

In terms of sector focus, the fund invests across energy, water, digital, and transportation sectors. One of the standout components has been the private partnership dynamics in the transport sector, particularly with Transnet, South Africa’s state-owned transport and logistics company. Omar revealed that the fund is actively seeking participation in public-private partnership (PPP) opportunities. Talks of engagements in projects like the Nkumazi water project demonstrate the proactive approach of filling the infrastructure gap.

In the energy sector, which remains a priority, the fund identifies 12,000 megawatts worth of projects, progressively absorbing opportunities that promote energy security. “We are keen to continuously support initiatives that not only contribute to infrastructure development but also ensure sustainable and inclusive economic growth,” Omar said, emphasizing the importance of the fund’s multi-faceted investment strategy.

As Ninety One continues to raise capital, pushing towards its ultimate target range of 5 to 15 billion rand, the fund is set to remain a vital tool in enabling South Africa’s infrastructure development. Bashir Omar, with his insights, underscores the blend of patience and strategic action fundamental to achieving these ambitious goals, reinforcing that responsible investment is as much about the journey as it is about the destination.

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