Three decades of purpose-driven investing

This year marks the 30th anniversary of the Futuregrowth Infrastructure and Development Bond Fund. Having managed it for most of its life, I’ve reflected not only on its financial milestones but also on the enduring purpose that has guided us since the beginning.  

When the fund launched in 1995, South Africa was a nation in transition - full of hope and possibility but facing daunting developmental backlogs. The goal was simple yet bold: channel long-term pension fund capital into rebuilding a country long divided.

Source: Stock image

At the time, investing in infrastructure for both financial return and social good was a radical idea. Many institutional investors doubted the viability of developmental investments. But we saw an opportunity to prove that “doing good” could coexist with strong financial performance. 

Evolving with purpose 

The fund’s core philosophy remains grounded in discipline, diversification, and developmental impact intent. With the flexibility to invest up to 55% in unlisted credit, we access high-yielding, less correlated assets - offering investors both stability and diversification in volatile markets.

Our deliberate off-benchmark positioning and active interest rate risk management have enabled the Fund to consistently outperform the All-Bond Index since inception. 

But performance is only part of the story. 

The true legacy lies in the long-term impact we’ve made across sectors like affordable housing, renewable energy, student accommodation, and transport – where investments translate into homes, jobs, electricity, and dignity for South Africans.

Source: Futuregrowth

A standout example is our investment in an entity that has pioneered affordable rental accommodation through a unique office-to-residential conversion model. By transforming underutilised office blocks in Johannesburg’s business districts into high-quality, competitively priced residential estates, this initiative meets the needs of urban households without sacrificing quality. 

The social and economic impact is significant: local job creation through construction and operations, reduced commute times, and increased access to economic opportunities. Critically, by integrating historically marginalised communities into urban centres, this model fosters social inclusion and supports more sustainable cities. 

Sustainability sits at the heart of our investment process. We integrate non-financial analysis from screening, assessment of risk, through monitoring- prioritising projects that address environmental challenges, meet social needs, and demonstrate sound governance. As signatories to the UN PRI and CRISA, we align our work with global responsible investment standards. 

For example, the Futuregrowth Infrastructure & Development Bond Fund, which has a look-through to our Power Debt Fund, has invested over R9.5 billion in 31 renewable energy projects, supporting South Africa’s clean energy transition and a low-carbon economy, while delivering long-term, inflation-beating returns for our investors. 

Source: Roggeveld Wind Farm

Private debt and unlisted infrastructure assets, such as those in this fund, complement traditional fixed income investments. They provide higher yields and stronger legal protections, with lower volatility in public-private partnership (PPP) projects supported by long-term, contracted cash flows. These assets also enhance portfolio diversification and unlock opportunities unavailable in public markets, including greenfield developments. 

For investors seeking stable, risk-adjusted returns with meaningful impact, the Futuregrowth Infrastructure & Development Bond Fund offers a compelling proposition that balances financial outcomes with South Africa’s developmental needs.

Navigating Complexity 

Of course, none of this comes easily. South Africa’s infrastructure landscape presents a unique mix of opportunity and complexity, requiring deep experience and discipline. 

The estimated R2 trillion infrastructure funding gap over the next decade creates vast investment potential across energy, water, and transport. But it also brings real risks: political and regulatory uncertainty, implementation delays, and execution challenges.  

This is where our depth of experience and disciplined approach are vital. Over 30 years, the Futuregrowth Infrastructure & Development Bond Fund has navigated South Africa’s evolving economic landscape, applying lessons learned to refine and strengthen our process. 

Our due diligence and risk assessment framework is rigorous and multidimensional. We evaluate not only financial viability (including cash flow sustainability, debt serviceability, and asset bankability) but also non-financial factors that affect long-term success. These include governance, environmental impact, social relevance, and stakeholder relationships. 

Source: Kruisvallei Hydro

We prioritise loans backed by strong off-takers – entities with binding agreements to purchase the project's output – with our process involving on-site visits, board engagement, and comprehensive governance reviews. These insights often lead to improved deal terms and stronger investor protections. 

Rigorous due diligence is non-negotiable. Supported by over 40 professionals, we dive deep into every opportunity. Our flexible asset allocation, especially the ability to invest significantly in private debt, lets us access high-yield opportunities that diversify portfolios and manage risk. Integrating non-financial factors early helps build resilience and avoid pitfalls.

Crucially, we invest in relationships – maintaining strong, ongoing engagement with counterparties, syndication partners, and intermediaries keeps us close to the market and sustains steady deal flow. This disciplined, multi-pronged approach has helped the fund deliver consistent performance while managing downside risk, which makes it a reliable choice for long-term investors who value both returns and impact. 

Building for the Future 

As the Futuregrowth Infrastructure & Development Bond Fund marks this major milestone, it stands not only as a leader in developmental debt but as a cornerstone of sustainable investing in South Africa. 

With over R21 billion in assets under management and a track record of consistent outperformance, the fund has proven that long-term, inflation-beating returns can go hand in hand with measurable social and environmental impact. Its ability to invest in high-yielding private debt alongside listed assets provides the flexibility to navigate complex markets while supporting critical national priorities like renewable energy, transport, and affordable housing. 

Source: Kalkbult Solar Farm

Looking ahead, our vision is to deepen our role in financing South Africa’s infrastructure future. This means scaling investments in high-impact sectors, innovating with blended finance models, and continuing to advocate for regulatory reforms, such as evolving Regulation 28, to unlock further institutional capital.  

With R200 billion in assets under management across Futuregrowth, we are well-positioned to channel meaningful capital into the areas where it’s needed most. For consultants and institutional investors, the fund offers more than diversification. It enables them to meet clients’ rising demand for sustainability-aligned portfolios, backed by a robust suite of support tools, thought leadership, and on-the-ground investment insights.

As a signatory to the UN PRI and CRISA, the fund meets global standards while responding to local realities. What has kept me inspired over the past 20+ years is that this work has never been just about yield curves and credit spreads. It has always been about purpose and using the tools of capital markets to build a more inclusive, more functional society. 

As we enter the fund’s fourth decade, I remain proud of what we’ve achieved and more committed than ever to using the power of capital to shape a stronger, more sustainable South Africa.