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By Johan van der Merwe, 05 March 2014
The fund will focus on investments in credit and debt capital markets instruments in selected African countries.
This is the third African fund launched by Sanlam with the objective of allowing investors to take advantage of strong growth on the continent.
Johan van der Merwe, chief executive officer of Sanlam Investments, says this new fund aims to offer investors exposure to a diversified pool of quality credit risk assets, paying attractive USD-denominated returns. “The positive African growth story is well-documented and the fund will offer investors an opportunity to benefit from this on an attractive risk/return basis. It will deepen the debt capital markets in Africa, while facilitating economic growth and supporting the development of essential infrastructure across the continent.”
The fund is open-ended and the target is to raise capital in excess of USD300 million. Sanlam, a leading African financial services company headquartered in South Africa, will act as the anchor investor and has committed an initial amount of USD50 million, which is expected to be substantially invested by the end of March 2014.
The fund endorses environmental, social and governance (ESG) principles and will generally invest in countries in which the greater Sanlam Group has a physical presence, providing the fund advisor with the additional benefit of being able to leverage of the knowledge of the group’s various local operations.
Sanlam Credit Fund Advisor, a subsidiary of Sanlam Capital Markets (“SCM”), will act as fund advisor. SCM has been active in the South African credit and debt capital markets for more than 10 years and has a well-established debt origination and credit risk analysis infrastructure. The fund is a natural extension of SCM’s credit business in Africa (excluding South Africa), which dates back to 2009. During this period SCM has invested in African assets in excess of USD200 million, allowing the company to build up valuable hands-on credit risk experience in the African market.