Billion dollar fund focused on unlocking local infrastructure projects to be launched by Eos Capital in 2019
Private Equity Fund Manager, Eos Capital is gearing up to launch a new infrastructure fund sized between N$1 to 1.5 billion, focusing on unlocking local infrastructure projects in public services, energy, water, education and healthcare.
The fund, dubbed the Infrastructure Development and Investment Company of Namibia (IDICON) was introduced at an event held in Windhoek this week and Eos Capital confirmed to the Economist that they are currently doing the fundraising.
Speaking at the event themed ‘Investing in scary times’, Tanya van Lill, CEO of Southern African Venture Capital and Private Equity Association (Savca) urged pension funds to invest in unlisted infrastructure funds.
According to van Lill, these funds provide attractive returns over a long-term, typically around 15 years, mostly in the form of inflation-linked income as well as some capital gain over the long term.
“Infrastructure assets provide returns of about 15% per annum, with these returns decreasing or increasing depending on the inflation rate. Cashflows are predictable and relatively low risk, thus providing a good match for pension payouts,” she said.
Eos Capital stressed that the current barrier for pension funds to invest in the new infrastructure fund is the limit that the Pension Fund regulations has placed on their investment into unlisted investments, a maximum of 3.5% of total assets.
Meanwhile, in South Africa and other neighbouring countries the limit is 10% of assets, allowing pension funds flexibility to invest both into private equity, which stimulates the private sector, and infrastructure funds, which stimulate the economy and provide social benefits.
Caption: Tanya van Lill, CEO of Southern African Venture Capital & Private Equity Association (Savca).