The Cape-based specialist fixed income asset manager, Atlantic Asset Management, has positioned itself to exploit the investment gap left by banks as result of the Basel III constraints.
The group has launched a new business unit focusing on the high impact unlisted debt market called Atlantic Specialised Finance.
The head of the new operation Heather Jackson said that recent regulatory changes for institutional, retail and corporate interests in South Africa have opened up a vast and growing opportunity in unlisted investing.
“This is particularly true for unlisted debt, which is favoured by the regulatory changes and given additional impetus by the commercial banks’ declining ability to lend into perceived higher risk areas as a result of more stringent capital requirements under the new Basel III limits” said Jackson.
She said Regulation 28 of Pension Fund Act has made the operation possible for the mainstream investment management industry.
Jackson said, previously head of Socially Responsible Investments at Cadiz Asset Management, will be joined Rob Nagel, previously analyst and portfolio manager at Cadiz Asset Management, Dean Hand, former CEO of the Greater Good Group and vastly experienced in the social development and impact investing space and Laurie Scholtz, a highly qualified research analyst in the developmental sector, who is previously from Greater Capital.
“We are very excited about the new venture and the prospects for growth it presents. At the appropriate time, the team will expand further, adding to its capabilities and resources,” said Atlantic Asset Management MD Murray Anderson.
“Apart from the regulatory aspects, Atlantic will be investing in an often overlooked sector of South Africa’s economy. Although unlisted, such investments offer very attractive returns and which are difficult for investors to access. There is thus a large and growing demand for unlisted debt, in particular, where one can invest in already proven and sustainable business models,” said Jackson.
“Given South Africa’s socio-economic challenges, there is a wonderful congruence in financing innovative private sector solutions to social demands and which are not being met by government – hence the term high impact.
“Atlantic Specialised Finance will provide a mechanism to unlock capital for this sector, as well as providing investors with a means to access the very attractive returns available to those providers of capital. Atlantic intends to be a catalyst in this sector in line with the business philosophy of being a force for good,” Jackson said.