SANLAM FOCUS SANLAM INVESTMENTS: FUNDS THAT MAKE AN IMPACT

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At Sanlam Investments, we estimate that we will help support more than 38 000 lives, directly and indirectly, over the life of the investments we have made to date through our impact funds, ˮ says Mervyn Shanmugam.

Over the past few years, Sanlam Investments has launched several funds to impact the environment and society positively. Here is a snapshot of the funds and their successes:

SANLAM INVESTORS’ LEGACY IMPACT RANGE

The Sanlam Investors’ Legacy Range was launched to create and preserve jobs in response to the sharp economic downturn and significant job losses experienced due to the Covid-19 pandemic. The fund range looked to find investable opportunities that enable South Africa to grow more equitably and inclusively while aligning with the National Development Plan 2030 of job creation. As of 2022, the business had approved 19 transactions totalling R1.5 billion (15 paid away, totalling R1.38 billion) towards businesses that will preserve and create jobs.

SANLAM PRIVATE EQUITY MID-MARKET FUND

The Fund provides equity-type finance to medium-sized South African companies to support business growth and ensure jobs are retained in the short-term and increased in the longer-term.

Examples of impact:

• Cavalier Group

Sanlam Investments’ Private Equity capability is committed to supporting Cavalier – an AAA-grade red meat business – in its aim to add 200 jobs to its labour force over the life of the investment and to contribute to the upliftment of the people situated in the nearby communities. Cavalier is the largest employer in the Cullinan region, with 60% of its workforce being women, and Sanlam Investments has helped to create 100 new jobs already in the first two years of investment. The business has also been working to roll out several projects for the benefit of the community and its employees, most of whom are local, previously disadvantaged individuals.

• Absolute Pets

Since the Fund’s investment in Absolute Pets in April 2021, the business opened 45 new stores (well above the 15-store annual target). Absolute Pets has created over 150 new jobs throughout the investment to date. The profile of Absolute Pets’ employees is worth noting:

• 92% of previously disadvantaged

• 69% of female

• 66% under 35 years old

SANLAM INVESTORS’ LEGACY SME DEBT FUND

The Sanlam Investors’ Legacy SME Debt Fund provides debt capital to good-quality SMEs with the intention of preserving and creating jobs.

Examples of the fund’s impact:

The Fund supported black-owned specialist retailer Oilstar. The funding provided job security to around 630 employees, mainly from low-income households. Oilstar now expects to open additional sites, which will lead to the creation of further onsite jobs and indirect employment through its range of service providers.

The Fund provided finance to Mettle, an invoice discount business which has been in operation for over 15 years and will create jobs by extending funding to SMMEs.

Resilient Investment Fund

Sanlam Investment’s private debt portfolio focuses on lending to established SMEs in South Africa that require capital for growth but cannot access suitable finance from traditional sources. Various Funds in the business’s private debt portfolio provide capital to entrepreneurs and commercially viable businesses that are well-positioned to address some of South Africa’s most pressing challenges.

Beneficiaries of the portfolio’s lending include:

• Oasis Water: a leading clean water supplier outside the public sector. The funding will support Oasis’s strategy, which includes new stores in the township and rural areas.

• Capital Harvest: a specialist non-banking financial institution providing financing to farmers and the broader agricultural sector.

• Energy Partners: a utilities provider of unique energy-saving solutions which enables its clients to free up capital to grow their businesses.

Sustainable Infrastructure Fund

The Sustainable Infrastructure Fund forms part of Sanlam Investments’ mission to make a real, sustainable difference to the community, economy and planet. Investing in infrastructure also provides investors with compelling financial outcomes from opportunities not readily available in the market.

The Fund finances projects and companies across the broad spectrum of essential infrastructure sectors, prioritising energy (wind, solar, hydro, biomass and natural gas), water, ICT and transport. The Fund has an impact framework focused on economic growth and job creation, market development and environmental sustainability.

The Fund is financing the development of Redstone, a 100MW molten salt Concentrated Solar Plant tower (“CSP”) in the Northern Cape. Due to the thermal storage, this project is the first renewable energy project that can provide baseload energy into the grid.

Climate Fund Managers

Climate Fund Managers, a joint venture with the Dutch Development Bank, FMO, uses blended finance methods to combat the climate crisis by constructing long-term sustainable infrastructure in global developing markets. Core to its responsible investment mandate is delivering a net positive impact for every dollar committed.

CLIMATE INVESTOR ONE’S NOTABLE INVESTMENTS

Climate Investor One

Climate Investor One, Climate Fund Managers’ first facility, is focused on renewable energy infrastructure.

Climate Investor Two

Climate Investor Two is a financing facility mandated to invest in water, sanitation and ocean infrastructure projects. Several new project approvals and development agreements have been signed by Climate Investor Two across the water, oceans, and sanitation sectors.

CLIMATE INVESTOR TWO’S IMPACT

Kelp Blue: This kelp farm project should produce around 241 000 tons of kelp annually across 820 hectares.

Solar Water Solutions: At full scale, this project will treat 1667m3 of water each day, benefitting 400 000 people.

Azur: These facilities will treat 570 tons of municipal solid waste daily, generating 63.36 GWH per year.

Spectainer: This will encourage wide-scale industry adoption of collapsible shipping containers to reduce the carbon intensity of global cargo transport.

A Roadmap For The Future

A clear roadmap is followed at Sanlam Investments, with distinct goals the business uses to measure itself against. The business will steadily advance these goals, improving ESG incorporation and fostering partnerships with like-minded organisations such as Robeco and FMO. These partnerships boost Sanlam Investments' efforts to meet greater sustainability objectives. Together with the partners, the focus is on where the greatest impact can be made.

The mission is to build a better world for the next generation to inherit. This responsibility drives everything Sanlam Investments does.

Identifying outcomes and targets

Mapping excisting investments to the SDGs and other potential regiments.

Setting policies and positioning statements

Setting relevant ESG themed and asset class policies, and position statements.

Ensuring consistency throughout investment disciplines

Development of overnight mechanisims to ensure that risk management of sustainability matters is applied to all investment.

Our aggregated contribution to the colective reporting framework, considering the UNSDG*

Monitoting, tracking and measuring the extent of our aggregated contribution over time to the *United Nations Sustainable Development Goals, local NDP or other goal frameworks.

BY JANA