African Infrastructure Investment Managers (AIIM), Africa’s largest dedicated sustainable infrastructure equity manager, has announced the final close of its fourth pan-African infrastructure fund, African Infrastructure Investment Fund 4 (AIIF4).

The Fund achieved its hard cap, with $748m raised from a diverse investor base across Africa, Europe, Canada, US, Middle East and Asia with an additional $206m approved for co-investments alongside the Fund.

AIIF4’s fundraising exceeded the target by 50%, achieving strong support from AIIM’s existing investor base as well as new commitments from a select and diverse group of global investors.

Over half the capital came from new investors, many of whom made their first allocations to the African infrastructure sector through their commitments to AIIF4, a strong show of support for the Fund’s thematic strategy, its team and regional experience, as well as its high-quality cornerstone portfolio.  

Paul Frankish, AIIM’s Head of Strategic Initiatives, said: “Given the challenging global fundraising environment, we are delighted to have outperformed the targeted fund size. We received strong support from our existing investor base with a high level of re-ups from the supporters of our previous mandates which served to anchor the fundraising."

"We have also seen many new investors seeking to diversify their investment allocations into new markets which they consider provide strong long-term growth potential, as well as seeking investments with well-defined sustainability and impact strategies. These investors have all sought to enter Africa, as a new market with high growth and impact potential, alongside AIIM due to our long track record in the region and strong on-the-ground local presence,” he said.

Commitments were raised from 29 investors in total, with around 25% of funds raised from institutional investors in Africa, 42% from EU countries and the UK, 14% from Canada and the USA, and 17% from the Middle East and Asia.

The investors include pension funds, insurance companies, sovereign wealth funds, asset managers and family offices with 50% of commitments from DFI investors.  

Through its AIIF4 mandate AIIM is doubling down on its commitment to tackling climate change by setting decarbonisation and energy efficiency goals and maximising emissions avoidance opportunities through renewable energy deployment for each investment.

The Fund is also a 2X Challenge Fund through AIIM’s strategies to enhance gender diversity across its investment teams and the management teams across portfolio companies.

The 2X Challenge and its criteria form the global industry standard for assessing and structuring investments that provide women with leadership opportunities, quality employment, finance, enterprise support, and products and services that enhance economic participation and access.

As the most underserved infrastructure market globally, Africa has a significant imbalance between the demand for high quality sustainable infrastructure and the supply of those services.

AIIF4’s strategy is to focus on targeting market leading companies with primarily private sector counterparties, operating in one of our three key thematic verticals, with key secular tailwinds driving expansion potential.

By focusing on specific markets including South Africa, Morocco, Kenya, Nigeria, Ghana, Côte d’Ivoire, Senegal and Egypt, AIIM can execute on proprietary growth opportunities for AIIF4 through its on-the-ground presence in its key markets. 

Olusola Lawson, AIIM's Managing Director and Co-CEO said: “In developing the strategy we have focused on key themes which provide investors with long-term growth driven by structural deficits and secular tailwinds rather than volatile macro-economic cycles. This includes digital infrastructure, to capitalize on the surge in data consumption across the continent; energy transition, to address the chronic shortage of affordable power and the associated productivity losses for Africa’s corporates; and transport, ports and logistics, to meet the demands for moving goods and people through the world’s most rapidly urbanizing cities. All investments by the Fund are specifically tracked against climate, gender and governance objectives.”

AIIF4 achieved first close in June 2022 and has to date concluded commitments to seven platforms, providing investors with clear visibility of the strategy and early performance for the portfolio across the target sectors.

These investments represent commitments of over 60% for the Fund.

Since inception, AIIM has raised more than $4bn over eight funds and executed more than 70 transactions in target pan-African markets.