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Sanlam Investments, a unit of Sanlam Limited, backed by billionaire Patrice Motsepe, has rolled out a R4 billion ($234.8 million) Property Impact Fund to help close South Africa’s long-standing gap in social infrastructure.
The move comes as less than 2.7 percent of the country’s R5.8 trillion ($340.3 billion) pension savings is directed to private markets, leaving schools, clinics, housing and retail in many communities largely underserved.
Addressing the “missing middle”
Many lower middle-income earners, including nurses, teachers and police officers, fall outside government support but remain underserved by private investment. That group makes up as much as 30 percent of the population.
“The fund aims to directly consider the needs of the lower middle-income working class, contributing to a more inclusive and sustainable economy,” said Kamogelo Leeuw, portfolio manager at Sanlam Investments.
He noted an investable universe of more than R2.9 trillion ($170.1 billion) in social-impact property assets. Leeuw cited shortages in student accommodation, healthcare facilities and affordable housing as key barriers to wellbeing and productivity. “By investing in infrastructure, you plant a seed that lets the entire community flourish,” he said.
Backed by Sanlam Capital
Sanlam has seeded the fund with R1.4 billion ($82 million). Structured as an open-ended vehicle, it targets CPI plus 9 percent in annual returns, with a minimum investment of R50 million ($2.9 million) for institutional participants.
The fund will prioritise five growth areas: education, affordable housing, rural and township retail, student accommodation and healthcare. Collectively, these sectors represent more than R2.8 trillion in potential investment, driven by expanding consumer demand and long-term tenant stability.
Building social infrastructure
Real estate tied to education, housing and health is expected to outperform traditional commercial property as demographic pressures intensify. Investors gain immediate exposure to a portfolio valued above R800 million ($46.8 million).
“This spatial intelligence enables us to pinpoint communities where capital will have the greatest socio-economic impact,” Leeuw said, adding that the team has delivered higher returns with lower volatility than listed property or equities over five years. The fund measures outcomes against the UN Sustainable Development Goals, assessing each project’s contribution to job creation, environmental stewardship and inclusive growth.
Sanlam expands private-market strategy
Motsepe, who holds an indirect 7.8 percent stake in Sanlam through Ubuntu-Botho Investments, continues to play a central role as vice chairman. Sanlam recently reported a 6.9 percent rise in first-half profit to $654 million, supported by gains in its life, general insurance and investment management units. The group has been expanding its private-market strategy as it seeks new sources of growth in a tightening public-market environment.
