Infrastructure equity management company African Infrastructure Investment Managers (AIIM) has achieved the final close of its fourth pan-African infrastructure fund African Infrastructure Investment Fund 4 (AIIF4).

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

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

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

Further, through AIIF4, 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.

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 US, 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 development finance institution investors.

Africa is the most underserved infrastructure market globally and 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 that operate in one of AIIM's 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, the company says.

“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,” says AIIM strategic initiatives head Paul Frankish.

“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 sought to enter Africa, as a new market with high growth and impact potential, alongside AIIM owing to its long record in the region and strong on-the-ground local presence, he notes.

“In developing the strategy, we focused on key themes that provide investors with long-term growth driven by structural deficits and secular tailwinds rather than volatile macro-economic cycles,” says AIIM MD and co-CEO Olusola Lawson.

“The key investments include in digital infrastructure to capitalise on the surge in data consumption across the continent; in energy transition to address the chronic shortage of affordable power and the associated productivity losses for Africa’s corporates; and in transport, ports and logistics to meet the demands for moving goods and people through the world’s most rapidly urbanising cities.

“All investments by the AIIF4 fund are specifically tracked against climate, gender and governance objectives,” he adds.

Meanwhile, the AIIF4 fund is also a 2X Challenge Fund, which is also part of 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, AIIM says.