Asset manager Stanlib has successfully raised R5.5-billion from a range of prominent South Africa investors into its Infrastructure Fund II (Fund II), which was launched in June.

The fund will have a fourth and final close in February next year, during which Stanlib aims to raise a further R2.4-billion.

Stanlib infrastructure investments head Greg Babaya says it is a positive sign seeing private investment of this nature, at a time when President Cyril Ramaphosa has called on the private sector to invest in infrastructure projects to reinvigorate the economy.

“It proves that there is significant appetite for impact investing and, specifically, for upgrading South Africa’s energy, transport and telecommunication sectors,” he adds.

The fund will invest mainly in South African post-construction infrastructure projects, but also has the capacity to invest in greenfield projects.

Babaya says Fund II not only offers investors diversified, risk-appropriate, stable, long-term returns, but is a powerful means of making a tangible and sustainable difference to South African communities.

The fund has a broad infrastructure focus and initial investments by the fund are expected to include operating renewable energy plants, mature toll roads, grain storage facilities and investments in fibre and data infrastructure.

Additionally, the fund is investigating investment opportunities in infrastructure sectors such as storage, telecommunications, social infrastructure, water and pipelines.

This fund follows in the steps of the highly successful Stanlib Infrastructure Private Equity Fund I (Fund I), which is fully invested and closed for new investments.

Apart from attractive returns for investors, Fund I’s investments have generated about 700 direct jobs and helped reduced carbon emissions by more than 700-million tons a year.

Babaya points out that the 80 MW Kouga Wind Farm is an example of a successful investment that has provided wide ranging societal benefits to its surrounding communities and economic development in South Africa.

The surrounding communities own 26% of the project and, to date, have received significant upliftment such as the building of new schools, skills development, healthcare and bursaries.

All but two of the Fund 1 investors are investors in Fund II, bearing testament that Stanlib’s clients are seeing the investment benefits of the funds’ strategies, as well as the contribution they make to the South African economy.

“The call for private partnership and investments into infrastructure has been widely heard. At Stanlib, we are proud to be in a position to raise and deploy capital in areas that are most needed in South Africa.

“We will continue to grow and develop our private markets capability as we truly believe that these strategies will diversify the sources of return for our clients and deliver stable, inflation-beating, long-term competitive returns just as we did with Fund I,” says Stanlib CEO Derrick Msibi.

Stanlib manages more than R60-billion in pan-African private debt and equity, which makes it a key player in the private equity industry and enables it to offer its investors a range of alternative assets and specialist skills.