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Yielding a consistent ROI, while generating measurable, positive impact
Yielding consistent ROI, while generating measurable, positive impact
By Benedict Mongalo, Managing Director: Novare Impact Investment Partners
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As a fully-owned subsidiary of Novare Holdings, Novare Impact Investment Partners is excited to announce the launch of the new Novare SA Impact Fund, which we believe is quintessential to help South Africa and its people recover from the devastating social and economic consequences of the COVID-19 pandemic.
One of the key differences between such an impact investment fund and a private equity fund lies in its primary goal. Even though ‘impact’ has always been central to any of Novare Holdings’ investment strategies, traditionally, the primary goal of a private equity fund is to maximise financial returns. The primary goal of an impact investment fund is to generate optimal ROI, and achieve measurable, positive impact on both the environment and our society.
The four key objectives of the Novare SA Investment Fund
The Novare SA Impact Investment Fund has been purposefully structured to effectively address four key objectives:
i. To consistently generate positive financial returns
ii. Predominantly invest in projects with socio-economic and environmental impact in South Africa;
iii. Also invest around 25% of the committed capital in the Southern African Development Community (SADC) - to support regional integration and possible expansion endeavours of investee companies, and
iv. Help counteract the effects of the current economic downturn, through, for example, job creation. Benedict Mongalo, Managing Director, Novare Impact Investment Partners
The impact projects will strategically be earmarked to help drive and support the priorities of our National Development Plan (NDP), in critical, targeted sectors such as agriculture, manufacturing and economic infrastructure. Apart from its financial performance, the success of the fund will also be measured by the social returns generated and the key pillars of the UN Sustainable Development Goals (SDGs). These are poverty eradication and inequality, environmental sustainability and the creation of sustainable economic infrastructure, which have been identified as the barometer for measuring these social returns.
Poised for success
The following are some of the key cornerstones that the fund’s strategy for success will be built on:
• A blended investment approach: Combining relatively low-risk, low-return infrastructure projects with high-risk, high-return priority sector transactions, with the aim to achieve a moderate risk portfolio. that targets returns of an SA CPI rate of +12%.
• Deal pipeline: A multitude of solid crossindustry deals have already been lined up through exclusive, proprietary networks. Coupled with the fact that this is the fund’s vintage year during which we offer ultraattractively priced assets in a volatile economic climate, all indicators point to a substantial influx of investment capital.
• Multidisciplinary fund management team: The uniquely diverse team consists of veterans in both impact and privately negotiated investments, transactors, and specialists in environmental, social and governance (ESG) and technical matters, with the full support of the well-established back office of Novare Holdings. The team has extensive experience in the unlisted investment space and has raised and invested no less than two successful private equity funds which were largely deployed in greenfield projects.
Doing well, while doing good
The Novare SA Impact Investment Fund is ideally poised to become an investment-ofchoice for institutional investors (pension funds and developmental financial institutions) and high net worth individuals who are mindful of investing responsibly, by gaining optimal financial yields whilst making a difference in the greater scheme of things. Novare Impact Investment Partners is an authorised financial services provider. For more information, go to www.novare.com.
