More than two-dozen global investors and development financial institutions have invested a combined $954 million in Cape Town-based African Infrastructure Investment Managers, or AIIM. The sustainable infrastructure investing firm was established in 2000 by Old Mutual Investment Group and the Macquarie Group.
Nearly $750 million will be allocated to AIIM’s fourth pan-African infrastructure fund; $206 million will be reserved for co-investments. More than half of the capital came from new investors. “We have seen many new investors seeking to diversify their investment allocations into new markets [that] provide strong long-term growth potential, as well as seeking investments with well-defined sustainability and impact strategies,” said AIIM’s Paul Frankish. “These investors have all sought to enter Africa, as a new market with high-growth and impact potential.”
Africa’s infrastructure gap
Africa’s infrastructure finance gap is an estimated $100 billion a year. The lack of quality infrastructure on the continent shaves 2% off annual economic growth and reduces economic productivity by up to 40%, according to the World Bank. Institutional investors, led by pension funds, are increasing allocations to the underserved market (see, “How Africa’s pension funds are financing the continent’s infrastructure gap”).
AIIM’s investors include pension funds, insurance companies, sovereign wealth funds, asset managers and family offices from around the globe.
Impact management
AIIM will make green infrastructure investments in South Africa, Morocco, Kenya, Nigeria, Ghana, Senegal and other pan-African markets. It will focus on digital infrastructure, the energy transition, transport, ports and logistics to move goods and people through rapidly-urbanizing cities. And it will track its investments against climate, governance and gender metrics.
The fund’s mandate to improve gender diversity across its investment teams and management of portfolio companies qualifies it for the 2X Challenge.
