STANLIB, a South African multi-specialist investment company, has reached a final close of its first private equity infrastructure fund, raising R1.2bn ($104.8m) in total commitments.

Approximately R800m ($69.89m) was raised from local institutional investors since its first close in May 2013.

STANLIB CEO Seelan Gobalsamy, said: “STANLIB is continuing to boost its alternative investment capabilities, in line with its strategy.”

“As we expand across Africa, we would like to focus on alternative assets and transactions that can make a real difference in South Africa and the continent. We have identified infrastructure as an area where we can have a great impact as infrastructure gaps are consistently cited as one of the biggest challenges to doing business in Africa. Through our investments we aim to create employment and help grow the economies we operate in,” he added.

STANLIB Infrastructure Private Equity Fund will invest in equity stakes in private sector developed infrastructure projects through its Infrastructure Fund.

The 10 year closed-ended Fund will invest in sectors requiring third party capital and specifically projects presenting an attractive combination of risk and return.

The majority of the R1.2bn will be channeled into South African infrastructure projects under development, with the remainder to be invested across Sub-Saharan Africa (SSA).

Renewable energy will be a key focus of the Fund, as well as investment opportunities in water, power, transport, telecommunications and oil and gas infrastructure projects.

The asset manager has already made investments accounting for more than half its Fund total commitments.

Greg Babaya, Head of the STANLIB Infrastructure Investments Franchise, said: “If you believe the fundamentals about the dire need for infrastructure in SA and SSA and the funding constraints in the public sector, private sector investment in public sector infrastructure is a given.”

“We provide that platform and believe that alternative investments will be playing an increasing role in most Institutional investments portfolios. This is an example of one such alternative investment opportunity that will ultimately benefit our country over the long-term. For us, this is just the beginning,” he said.

A second fund, focusing on post-construction and operational infrastructure assets, is also under development.

To date, its focus has been on new-build opportunities mainly in renewable energy, through the Department of Energy’s Renewable Energy Independent Power Producer Procurement (REIPP) programme.

Through the REIPP, solar and wind power in South Africa are becoming important contributors to the national energy mix and STANLIB expects this trend to continue.

“We believe our industry can ultimately make a difference, and this Fund is an example of that. Through it, our aim is to channel private sector capital into projects that will have a marked impact on our country and be a conduit for future growth and prosperity in Africa,” said Gobalsamy.

In addition, there are plans for conventional base load power to be added by independent power producers presenting tangible benefits to the economy at large, and additional opportunities for investors such as STANLIB.

The STANLIB Infrastructure Franchise was created through the absorption of the Infrastructure Equity Unit from Standard Bank, and was a collaborative effort between STANLIB, Liberty and Standard Bank.