Ashburton Investments, the asset management business of FirstRand Group, yesterday launched the world’s first inflation-linked debt investment for renewable energy projects.
The debt offering is for infrastructure projects under South Africa’s renewable energy independent power producer procurement programme. Shalin Bhagwan, the head of fixed income at Ashburton, said yesterday that by investing in the consumer price index (CPI)-linked debt offering, South African institutional investors could earn real yields of 4 percent a year before fees.
“Investors that follow a liability-driven investment strategy, including defined contribution pension funds who wish to target a minimum real income in retirement, should find value from including this asset class as part of their broader strategy,” Bhagwan said.
He said the company, which has assets worth more than R132 billion under management, had already secured a R1bn commitment from its first investor, a major South African insurer.
He said Ashburton was on course to raise the targeted R3bn for the initiative.
Corneleo Keevy, a portfolio manager of infrastructure development funds at Ashburton, said that in addition to the exclusive focus on CPI-linked debt, there would be “a clear preference” for investments in projects in the earlier rounds of the renewable energy independent power producer procurement programme. Such projects were already operational, the company said.
It said it had already invested in two operational renewable energy projects.