TIP One partnership with SDG to raise global impact funds to invest in Africa

Transformation Investment Portfolio (TIP) One, the ZAR X listed instrument that is building a portfolio of BEE Scheme investments, is pleased to announce a cooperation agreement with SDG Global Group (SDG) to work together to set up funds for investing in Africa, and to raise funds from international investors for impact projects in Africa, including investing in TIP One.

SDG, an investment, consulting and advisory group that focuses on investing in and building scalable businesses in the sustainability sector, has been operating in Africa and other emerging markets since the 1980s. The SDG team is highly experienced at bridging the gap between the requirements and expectations of international investors, organisations and businesses, and the realities and difficulties of operating in emerging markets.

Simon Littlewood, CEO of SDG, says: “The sustainable development of Africa is important not just for the continent, but for the entire planet. With projections that, by 2050, one in four people in the world will be living in Africa, it is a market that businesses and investors cannot ignore, but which few currently have exposure to. Our range of funds and other products aim to reduce the risk for international investors, whilst providing the funding for businesses and entrepreneurs in Africa to be able to grow and develop the continent sustainably and fairly, generating wealth creation within Africa for all Africans, and promoting the aims of the UN’s SDGs.”

Lemao Ditodi, Tip One FD, says: “TIP One’s ability to impact and facilitate economic transformation in South Africa, while at the same time offering attractive returns to investors, is most compelling. In partnering with SDG and its global footprint, we aim to raise capital not only to invest into TIP One, but other high impact projects across the continent. Our ability to list more of these instruments meets international investor requirements for transparency, governance, impact reporting, market pricing and regulatory comfort.”

Littlewood continues: “In addition to our funds and bringing investors, we use our international network to identify business partners, markets, and trade opportunities for our projects in Africa. Working with TIP One strengthens our presence on the ground in South Africa and gives us access to experts in BEE. Our growing network affords us access to an increasing range of businesses and investment opportunities to service the needs of international organisations, businesses and investors looking at Africa.”

TIP One is supported by the African Financial Group (AFG), which has 20 years of experience in investment and advisory work in Africa, initially with a focus on healthcare, before broadening across the market. AFG has in-depth knowledge of impact projects and economic transformation. Dr Gil Mahlati, founder and chairman of AFG says: “The combination of SDG’s global knowledge and networks, with the on-the-ground presence of AFG, and TIP One’s model makes for a compelling and powerful impact proposition.”

The SDG team has been active in the sustainability sector since the 1980s and has witnessed the damage of development when it is not carried out sustainably. Africa’s current population of 1.2-billion is projected to grow to 2.5-billion by 2050, with urbanisation rising from around 30% to the world average of 50%+, meaning cities and towns will need to be built for an extra billion people – double China’s experience. Providing the additional food, power, education, jobs, infrastructure, housing, water, financing and other resources, at a time when the world faces the consequences of climate change and dwindling natural resources, presents one of the greatest challenges – and opportunities – for financiers, entrepreneurs, businesses and technologists.

“As one of the earliest foreign investors in China, the SDG team experienced the transformation of China from a poor, primarily agricultural economy to an economic super-power through urbanisation, industrialisation, technological adoption, financial innovation and entrepreneurship,” adds Littlewood. “Africa is going through a similar surge of development and wealth creation, but at an accelerated pace due to its higher population growth, advances in technology, and the global commitment to sustainability.

“Despite a 1.2-billion population, annual start-up investing in Africa is estimated at only $2-billion. Its financial system, private equity and venture capital (VC) industries, and securities exchanges are relatively undeveloped. A significant amount of recent VC funding into Africa has been in fintech, recognising the need and opportunity.”

For additional information, please email info@tiponesa.com or info@sdgglobalgroup.com

TIP One

Transformation Investment Portfolio (TIP) One is the first of a new generation of Impact instruments listed on the ZAR X stock exchange. It is designed to facilitate, fund and transform ownership in the SA economy and drive financial inclusion. TIP One is building a portfolio of BEE schemes that are in turn invested into listed companies. These investments can be acquired at compelling prices given the large BEE discounts that typically exist between these schemes and their underlying investments.

Given the historic imbalances in South Africa, government policy aims to increase black participation in the economy through promoting BEE schemes that are designed to raise black ownership of the economy. It is estimated that BEE Schemes own R400bn of listed equity in South Africa, but these schemes often suffer from a lack of capital and liquidity, despite been valued at significant discounts to their underlying holdings. By building a portfolio of these Schemes, TIP One is not only providing liquidity into this market, but also unlocking value for existing owners. This creates an attractive combination of impact and returns. It drives financial inclusion by giving smaller black investors that do not normally have access to such BEE Schemes the ability to participate in a portfolio of them in a transparent, low cost and easy to access vehicle.

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Increase investment in Africa or miss the UN’s SDG deadline

A Standard Chartered survey conducted between July and August 2020, amongst a panel of the world’s top 300 investment firms with total assets under management (AUM) of more than USD50 trillion*, found that:

  • Only 3% of their AUM is invested in Africa
  • Lack of investment in emerging markets puts the chances of meeting the 2030 SDG deadline at risk
  • Of those already investing in Africa, 93% say they will likely increase their investment in the future

Africa is not getting the investment needed to help the world meet the UN’s Sustainable Development Goals (SDGs) by 2030, new research from Standard Chartered has revealed.

The $50-trillion question investigates how some of the world’s largest asset managers – with a combined USD50 trillion in AUM – are investing at this critical time for the global economy and the environment.

Emerging markets are seeing a massive shortfall in investment

Our research shows that almost two thirds (64%) of the panel’s AUM is invested in the developed markets of Europe and North America, while just 3% is in Africa.

Asia, which includes several developed markets, takes 22%, while just 2%, and 5% of the assets are invested in the Middle East and South America, respectively.  

The risk posed by emerging markets was flagged as a major barrier to investment. More than two-thirds of investors believe emerging markets are high-risk, compared to 42% who believe the same for developed markets. More than half of the panel (53%) believe returns from investment in Africa are low or extremely low, with almost three in five investors (59%) saying that they are deterred from investing because they lack in-house specialist teams.

In contrast, those already investing in Africa are optimistic about the region, with 93% saying they are likely to increase investment in the future. 54% of Africa investors said their investments had performed as well as – or better than – their developed market investments over the past three years. The figure for emerging markets overall was 88%. However, Covid-19 may have made it even harder for emerging markets to get the investment they need. Some 70% of investors believe the pandemic has widened the capital gap further.

Which markets are getting the most investment? 
North America26%
Europe38%
Asia22%
Middle East2%
Africa3%
South America5%
Australia/Oceania4%

Not enough investment is linked to the SDGs

The research points to a growing focus on sustainability, with 81% of investment firms now taking a disciplined approach to environmental, social and governance investment. However, this is not translating into investment in the SDGs. Only 13% of the assets managed by our respondents is directed towards SDG-linked investments. Some 55 % claim the SDGs are not relevant to mainstream investment and 47% say investment in the SDGs is too difficult to measure. However, one-fifth of investors admit that they were not aware of the SDGs. Respondents point to regulatory changes, favourable tax treatment, evidence of higher returns, better data for measuring impact, and increased demand from retail investors as the top five factors that might spur on more SDG investment.

What are the tools and incentives to encourage SDG investment?
Regulation that encourages SDG-linked products74%
Favourable tax treatment of SDG-linked investments63%
More evidence that investing in SDGs will not lead to underperformance63%
Better data to measure the impact of SDG investments53%
Retail investor demand for SDG-themed investments53%

Sunil Kaushal, Regional CEO, Africa & Middle East, Standard Chartered said there is still investment gap in Africa to realise the SDGs and this creates an opportunity for us to make a difference where it matters the most.

“A significant surge in private-sector investment – alongside public investment and commitments – will be required to bridge the gap and hit the SDG targets over the next ten years. Right now Covid-19 has made the imperative to act even stronger in the region.

Sunil Kaushal, Regional CEO, Africa & Middle East, Standard Chartered

There is no single answer to The $50-trillion Question, but it is evident that investors need to expand their focus beyond developed markets. Africa, and emerging markets generally, offers investors a unique opportunity: strong returns combined with the chance to have a significant, positive impact in the long term.”

The $50 Trillion Question study follows the publication of Opportunity2030: The Standard Chartered SDG Investment Map which first revealed the multi-trillion-dollar opportunity for private-sector investors to help achieve the SDGs in emerging markets.

*The $50 Trillion Question Investor Panel is made up of asset managers from the world’s top 300 asset management companies. With combined assets under management (AUM) worth more than USD50 trillion (the equivalent to half of global GDP), how the asset managers in our survey choose to invest will have a huge impact on humanity’s ability to solve some of the world’s biggest problems. This study is based on in-depth interviews with the panel, conducted between July and August 2020.

The below shows the panel broken down by AUM, role and location, all of which ensure it is representative of the global top 300 asset managers.


You can read the full Standard Chartered $50 Trillion Question report here.

The $50-trillion investor panel
by AUMby generalised job roleby location
19% are top 10 firms (over USD1 trillion)
46% are top 11-50 Firms (USD1 trillion to USD350 billion)
23% are top 51-150 firms (USD350 billion to USD90 billion)
12% are top 151-300 firms (USD90 billion to USD20 billion)
42% fund managers
41% strategists
17% emerging market specialists
42% are based in North America
42% are based in Europe
8% are based in Japan
3% are based in China
5% are based elsewhere

Standard Chartered

Standard Chartered PLC is listed on the London and Hong Kong Stock Exchanges. Follow Standard Chartered on Twitter, LinkedIn and Facebook.

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