It is possible to yield good returns and help combat climate change in the process. Climate Investor One — a debut vehicle from Climate Fund Managers — demonstrates this. Ultimately, it will serve electricity to 13-million people, avoid creating two million tonnes of carbon dioxide and create 10 000 jobs. It’s already scaled beyond its first target of $530-million.
Climate Investor One is an example of why there’s never been a better time to be an investor. Sanlam Investments believes new times demand new ways of thinking. The asset manager spots opportunities where others don’t. It believes that a broadly diversified asset allocation will yield long-term returns and empower investors to play a role in the real economy in South Africa and Africa. Key to this is the role of alternative investing in portfolio construction. This catalyses higher risk-adjusted returns, portfolio diversification due to low correlation with listed assets, and the ability to deliver financial — and social — returns.
Nersan Naidoo, chief executive of Sanlam Investments, says: “The saying ‘there’s never been a better time to be an investor’ stems from the incredible technological and human-centric advancements in Africa and globally. Now is the time for investors to be positive about these opportunities that go beyond the mainstream.”
Opportunities to invest with impact
Sanlam Investments has played its part in investing in key areas across the broader impact investment spectrum. Here are some of its alternatives:
- Climate Investor One
- The South African private debt fund, which finances entrepreneurs and businesses
- The Affordable Housing Fund, which invests in low-income housing developments
- The Hipgnosis, which invests in musicians
- The Glacier by Sanlam AI Flexible Fund of Funds, which uses AI to dynamically alter asset allocation
Alternatives like these help build the crucial diversification needed for a sustainable strategy in tough times. Naidoo says: “We know that when you blend the capabilities that we have — our active, index, and alternative capabilities — the result is a robust portfolio construction, with robust returns.”
How to successfully diversify? According to Naidoo, Sanlam Investments is doing so by:
- Deliberately building out the depth and breadth of its capability beyond traditional active management. It has an active manager and index tracking manager, which facilitate cost-effective solutions as part of a diversified portfolio.
- Building out its alternative capability through real assets.
Sanlam Investments also has experienced, high-performing people and the due diligence and governance procedures in place to seek opportunities when others don’t.
Naidoo concludes: “We want to be a key player in solving collective challenges to afford a better life for all South Africans. We have top-performing funds across our active, multi-management, index tracking and alternative capability that are well suited for our multi-asset strategy. Our expertise and our balance sheet allow us to think in new ways. And to live and breathe our belief that there’s never been a better time to be an investor.”