Old Mutual Seeks Capital For $1 Billion Africa Expansion Plan

Written by Kevin Mwanza

Dec 04, 2014

Written by Sarah Owermohle | From CPI Financial

The Old Mutual Investment Group has embarked on a capital-raising programme to increase its investment in sustainable projects on the continent by a further $1 billion over the next two years, it announced in a statement.

The company, which has more than $5.1 billion in pan-African investment beyond South Africa, is also the largest private sector investor in the continent with focus in the southern and eastern regions. The new tranche will help it grow its presence in West Africa, particularly Nigeria.

New agricultural investments in the pipeline include over $300 million in potential opportunities on the continent (excluding South Africa) which are currently being developed by its various investment teams.

Old Mutual Investment Group’s Director of Investment, Hywel George, said the investment focus is largely directed at sustainable projects around key development themes which go beyond listed equity, including alternative investment and fixed interest arenas such as low carbon energy, education, affordable housing, infrastructure real estate, agriculture and unlisted debt, diversified across countries, asset types, managers, and economic/inflation cycles.

“Over the past few years we have made a meaningful impact in the region by committing investment funding of around $500 million across this broad array of investments,” says George.

“By investing in schools, housing and infrastructure, we are not only supporting the development of the continent and making a lasting, positive impact on the social landscape, but also ensuring sustainable returns for investors. While private equity investments on the continent remain long term and illiquid, they are giving us net real returns of two per cent to three per cent above listed assets.”

George added that the world is finally awakening to the emergence of Africa and its exciting GDP as the next big regional growth story.

“China continues to expand its investment on the continent, while figures show there is also an increasing appetite for investment from the Middle Eastern economies, followed by Nordic countries, Asia, Latin America, the rest of Europe and the UK,” he said.