Diversified financial services company Alexforbes has created a R5bn fund to invest in local infrastructure projects.
Speaking to Business Times on Wednesday after the release of the group's financial results ended March, Gyongyi King, chief investment officer at Alexforbes Investments, said the group aimed to raise R5bn in line with its ambition to generate returns and contribute to economic growth.
“We want to see growth. As an emerging market we need infrastructure to support the growth of the country. Without good ports, stable electricity, stable water, housing and roads, we cannot grow,” King said.
She said historically, pension funds did not invest in infrastructure until the introduction of regulation 28 of the Pension Funds Act, which allows pension funds to invest in different asset classes to prevent the concentration of risk.
By creating the infrastructure investor funder fund we are creating a solution for investors to be able to access an asset class that perhaps they would not necessarily do on their own. By creating a fund structure, we can solve that problem and get capital to where it is needed most, which is infrastructure investment.
— Gyongyi King, chief investment officer at Alexforbes Investments
“Retirement is a long-term investment, as is infrastructure, so the two marry well. Members want to see their investments at play, and infrastructure projects tend to affect many communities, [so] you not only generate returns but obviously see the impact of your investment.”
Alexforbes, South Africa's largest pension fund administrator, has committed R1bn to the infrastructure fund since its launch, with R750m now being deployed in renewable energy and affordable housing projects.
The company also aims to invest in a number of highly rated, transformed asset managers investing in economic, social and environmental themes across the capital structure.
“There was a lot of interest but not a lot of investment,” King said. “It is a complex area of investment. It is not listed entities — you are not buying Naspers, you are investing in areas that are less known.
"By creating the infrastructure investor funder fund we are creating a solution for investors to be able to access an asset class that perhaps they would not necessarily do on their own. By creating a fund structure, we can solve that problem and get capital to where it is needed most, which is infrastructure investment.”
King said the group aimed to raise the capital and invest it in assets beyond just renewables, such as water, transport and ICT.
“Often people think of renewables as infrastructure [and] it has been a great investment, it has done well in terms of filling a power shortage, but we are looking at things like water, ports, IT infrastructure, [because] in a modern economy you need good technological infrastructure to grow. Our definition of infrastructure is broad and it is based on economic growth.
“Infrastructure investment is not just good for investors but it leads to better outcomes socially and economically.”
Alexforbes' infrastructure ambitions come as the government aims to invest more than R1-trillion in critical infrastructure in the next three years to lift economic growth in sectors including transport and logistics.
Financial highlights for Alexforbes for the year ended March 2025 included a 13% jump in operating income to R4.3bn; headline earnings from total operations increasing 15% to 70.8c a share; and total active members increasing by 4% to 1.42-million. Profit from operations was up 14% to R911m.
The group said that during the period under review the two-pot system had been a disrupter in the retirement fund sector, with Alexforbes reporting that a cumulative R5.5bn had been withdrawn from two-pot funds.
The group declared a final cash dividend of 33c a share, and 22c a share interim dividend, bringing the total dividend to 55c per share for the year. The group also declared a gross special dividend of 10c a share.
Presenting the results, CEO Dawie de Villiers said the two-pot system had been a disrupter mostly because of its effect on members, the industry and the government.
“It has wide-ranging effects in the market. It is a place where the employer benefits market and the retail market now intersect. This is a massive change for the industry; we are excited about it and think we are perfectly positioned as a retail consultant and employee benefits provider,” De villiers said.
“The biggest change for me is that retirement fund members are now actually starting to care about their retirement. The crux of the matter is that members care about the amount of money they can withdraw, they care about what is left to save and they care about how that grows, which was not the case in the past.”
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