Exclusive: AIIM launches third pan-African fund

The vehicle is the first to be raised by the manager founded by Macquarie and Old Mutual since the latter became sole owner of the business.

African Infrastructure Investment Managers has launched a successor fund to its second flagship vehicle in a significant milestone since it became a wholly owned subsidiary of South Africa’s Old Mutual Alternative Investments.

AIIF3 made its first potential investment earlier this month when it bought a 60 percent stake in DSM Corridor Group Tanzania, a dry bulk terminal operator in the Port of Dar es Salaam.

“The acquisition was funded by the seed fund for AIIF3,” Ed Stumpf, AIIM’s investment director, told Infrastructure Investor. “AIIF3 is AIIM’s flagship pan-African infrastructure fund and will make investments in a diversified portfolio of core and core-plus infrastructure assets across Africa, with a focus on sub-Saharan Africa.”

AIIF2 reached its final close in September 2011 on $547 million, a significant jump since AIIM’s debut pan-African vehicle, which closed on $186 million in 2004. The firm expects the fund to be fully committed by the end of this quarter, Stumpf said. He declined to disclose AIIF3’s target size or anticipated final close date.

Investors in AIIF2 include the International Finance Corporation, the African Development Bank, FMO, Proparco and the Development Bank of Southern Africa. Hong Kong-based Diamond Dragon Advisors is acting as placement agent for AIIF3.

AIIM was co-founded by Old Mutual and Australia’s Macquarie Infrastructure & Real Assets in 2000. AIIF3 is the first vehicle to be launched by the manager since Old Mutual bought the 50 percent stake it did not already own in the business, a move motivated by the company’s will to expand its asset base and generate strong returns from what it sees as one of infrastructure’s most promising markets.

Itself a joint venture, the firm has launched several pan-African platforms with specialist developers over the last couple of years, including Hydroneo Afrique and Joule Africa, backed by AIIF2.

In a hint that its third fund could also use a platform approach to generate dealflow, AIIM invested in the Port of Dar es Salaam via African Ports and Corridors Holdings, a holding company it said could be used to facilitate further port deals across Sub-Saharan Africa.