Emerging Africa Infrastructure Fund appoints Investec Asset Management to manage $670m fund

FOLLOWING a competitive tender process that brought interest from over 30 companies, from across Europe, Africa and North America, the Emerging Africa Infrastructure Fund Limited (EAIF or the Fund) has appointed Investec Asset Management (IAM) as its fund manager. IAM took over the management of the approximately US$670 million Fund on 9th May 2016.

EAIF is a public/private partnership. It is a member of the Private Infrastructure Development Group, and is funded by the governments of the UK, The Netherlands, Sweden and Switzerland, private sector banks and development finance organizations. Established in 2002, the Fund provides debt finance to private sector infrastructure projects in sub-Saharan Africa. To date, it has committed over US$1,2 billion to 63 projects in 20 countries.

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.

Launched in South Africa in 1991, IAM 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. IAM will manage the entire process for EAIF, from seeking out projects, evaluating loan applications, carrying out due diligence and managing the administration of transactions. It will also market the Fund internationally and monitor the loan portfolio.

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.

Over the last two years EAIF has recapitalised its business, strengthened its board, appointed its first executive director, revised and tightened all of its processes and procedures, improved its marketing and communications and closed transactions in power, gas infrastructure, telecommunications, sustainable energy, agribusiness, cement manufacturing and steel recycling.

Commenting on IAM’s appointment, Mr. White said:

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

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

Mr White says EAIF is a highly successful model of how to mobilise public and private capital to develop African economies and help deliver the Sustainable Development Goals. He expressed the thanks of the EAIF board to the outgoing managers, Frontier Markets Fund Managers Limited and its owner, Harith General Partners, for their custodianship of the Fund since 2013, which he said has contributed to the excellent reputation EAIF enjoys today.

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, EAIF provides growth capital, expertise and support to projects, with the aim of stimulating economic development, encouraging growth and employment, and fueling Africa’s long-term development.”

The announcement follows the recent launch of a joint venture between IAM and Growthpoint to invest in pan-Africa real estate and provides a further opportunity to attract international capital to African markets. As one of the largest third party investors in private equity, credit, public equity and sovereign debt across the African continent, IAM will integrate EAIF and the existing team into its African investment platform, which consists of over 73 Africa-focused investment professionals with over 991 years of collective investment experience and total investments in Africa (including South Africa) of US$27 billion.

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.”

Nazmeera Moola will work in tandem with EAIF’s Executive Director, Emilio Cattaneo. Mr Cattaneo, who is a direct employee of the Fund, has been central to the development of the Fund’s growth strategy.

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