Balanced portfolio the best defence
Funds: ‘consider increasing allocation in unlisted space’
“Government appears to have the political will to address SAs infrastructure deficit with the establishment of the Investment and Infrastructure Office, led by Kgosientso Ramokgopa, and which is located in the Presidency, a positive indicator of the importance placed on infrastructure investment.”
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says that in recent years there has been a clear
across emerging markets towards providing debt in noncyclical businesses such as infrastructure and other real assets. Despite SA having lagged in recent years, steps by government and industry bodies are laying the platform to correct this imbalance, he says. For SA to fulfil its potential, sustainable and inclusive economic growth is critical. This requires reliable infrastructure. However, lack of investment in critical infrastructure such as energy, rail, roads and ports has been one of the contributing factors to poor economic growth in SA, says Thavhiwa.
The near-term opportunities, he adds, are in renewable energy, including selfgeneration and the small-scale embedded generation sector. Other opportunities include telecommunications, transport and logistics and housing.
Simon Howie, co-head of SA & SA Fixed Income at Ninety One, says that, as a credit investor, Ninety One believes it has a key role to play in ensuring funding is available for viable projects. Infrastructure investment presents an opportunity to support the country s economic growth while at the same time providing good long-term returns for retirement funds. He says the investment opportunity is in both equity and credit. For retirement funds, equity offers the potential for long-term investments
underpinned by real assets, with the potential for upside. However, the bulk of the opportunity will be in credit not only because the debt component is far larger in most projects, but also because many projects will be owned by government, state-owned entities or corporates. An important consideration is the nature of the credit investment, says Howie. Rated and listed debt will be necessary to truly unlock the full depth of capital markets. This is an important role for funds that can invest in private debt. Ninety One has been investing in infrastructure through the Emerging Africa Infrastructure Fund, a debt fund that focuses on sustainable infrastructure across the continent. The fund has more than 42 investments and more than $1bn in committed capital. The infrastructure opportunity is compelling and already forms a cornerstone of our debt portfolio, says Howie. Debt provides an opportunity to sensibly deploy into physical assets at scale while meaningfully contributing towards SAs future growth.
nvesting for retirement through a retirement annuity (RA) is an effective and rewarding way to save for retirement because of the unique benefits offered. The most significant benefit, says Natalie Kiewitt, executive of Operations at PPS Investments, is the fact that it provides unparalleled tax savings, which can be used to boost retirement savings.
Source: PPS Investments. For illustrative purposes only. Performance is not guaranteed. Growth at CPI+4%.
Natalie Phillips. Simon Howie.
Nkhumeleni Thavhiwa.