African Infrastructure Investment Managers (AIIM), a subsidiary of Old Mutual Alternative Investments (OMAI), has completed the sale of its 12.67% indirect stake in the Bakwena Platinum Corridor Concession (BPCC) via its African Infrastructure Investment Fund 2 (AIIF2).

Finalised on 5 November 2024, the transaction transfers the interest to Gaia Fund Managers, a specialist asset manager facilitating institutional and pension fund investment in Africa’s emerging infrastructure asset class.

“This exit represents a critical milestone for AIIM, affirming our ability to deliver long-term value to investors,” said Moritz Thompson, Investment Director at AIIM. “This move reflects AIIM’s proactive approach in aligning its investment strategy with favourable market conditions, ensuring optimal value realisation and supporting continued infrastructure development in South Africa.”

AIIF2 has been invested in BPCC for 14 years, and AIIM’s involvement through other funds extends even longer. The sale is being concluded as part of the AIIF2 realisation process and has been executed following the strong recovery of traffic volumes after the COVID-related shutdown. It is also well-positioned to benefit from renewed GDP growth in South Africa.

The sale leaves only two remaining investments in its portfolio: Cenpower and IHS.  Cenpower Generation Ltd is a Special Purpose Vehicle created to develop the Kpone Independent Power Plant (KIPP) in the Tema industrial zone near Accra, Ghana. IHS Holding Ltd. is Africa’s largest independent telecommunications infrastructure company by the number of towers managed.

BPCC, responsible for managing a critical 385 km stretch of highway, has been a pivotal asset within AIIM’s infrastructure portfolio since AIIF2’s initial investment in 2010. The corridor, encompassing sections of the N1 and N4 highways, has been instrumental in facilitating economic growth, mainly through enhanced connectivity between Gauteng, Botswana, and Namibia.

However, the stark contrast between this well-maintained infrastructure and the crumbling road networks in parts of the country highlights the urgent need for broader investment in road maintenance across South Africa.

BPCC, holder of a 30-year concession with the South African National Roads Agency Limited (SANRAL), has consistently outperformed operational benchmarks since its inception in 2002. The concessionaire’s route management will continue until it is handed over to SANRAL in August 2031.

“The success of BPCC underlines the importance of well-structured public-private partnerships in addressing critical infrastructure deficits,” added Thompson.

The transaction also highlights the growing trend of infrastructure as a compelling asset class for institutional investors, particularly within emerging markets. As infrastructure investment continues to gain momentum across Africa, AIIM’s successful exit from the BPCC signals confidence in such ventures’ long-term attractiveness regarding GDP-linked returns, inflation protection, and predictable yields.

AIIM’s divestment comes amid heightened interest in infrastructure assets across Africa, driven by the continent’s growing need for resilient and sustainable transport networks.

“As Africa’s infrastructure needs continue to expand, we remain focused on identifying and nurturing opportunities that deliver both financial returns and broader socio-economic benefits,” noted Thompson.

The decision to sell to Gaia Fund Managers, backed by Sanlam Specialised Finance, ensures the continued operation and maintenance of the N1 and N4. AIIM’s choice of buyer underscores its commitment to a seamless transition, prioritising the ongoing functionality of the toll road, which serves thousands of motorists daily.

Gaia Fund Manager’s Chairman, Mich Nieuwoudt, said: “The transaction compliments Gaia’s existing interest in the N3 toll road and is aligned with our strategy of developing a transportation infrastructure platform which invests in existing and new infrastructure projects that not only provides investors with attractive inflation linked returns but promotes broad socio-economic upliftment.”

Mark Moorhouse, Executive Head: Infrastructure and Project Finance at Sanlam Specialised Finance said: “We are proud to provide funding for this transaction which fits well with our strategy to develop and leverage partnerships to support people and the planet through the provision of sustainable infrastructure.”

“Gaia Fund Managers has a strong track record in managing infrastructure assets, and we are confident that they will uphold the standards we have set,” concluded Thompson.

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