22 April 2010
Dutch pension fund manager Algemene Pensioen Groep (APG) has committed US$250-million of equity capital to resources group Pallinghurst for investments in mining, $200-million (about R1.4-billion) of which has been earmarked for South Africa.
The commitment is for up to 10 years, and will be made at the discretion of Pallinghurst Advisors.
As a first investment, APG will apply for a $50-million allotment in the upcoming equity placement by platinum producer Platmin – a Pallinghurst portfolio company that is listed on the JSE, the Toronto Stock Exchange and London’s AIM alternative exchange.
“We are proud to welcome the distinguished asset manager APG as co-investor in Pallinghurst,” Pallinghurst CEO Brian Gilbertson said in a statement this week. “We value APG’s confidence in our project initiatives, and indeed in South Africa.”
Pallinghurst’s “steel-feed” platform is another likely core area of investment for the APG funds, as the global steel market races to secure raw material input.
Sustainable development, job creation
APG senior fund manager Frank Asselbergs said that following a rigorous due diligence process, the pension fund manager decided to partner with the Pallinghurst team to broaden their exposure to the sustainable development of natural resources, and to key commodities in particular.
He said APG was very impressed with the commitment of the South African government to develop the natural resources sector in a responsible way and to encourage broad-based community groups to share in its embedded wealth, while creating an attractive investment climate for institutional investors.
“We trust that our commitment will not only provide attractive returns for APG and its clients, but also facilitate job creation and financial upliftment in South Africa,” Asselbergs said.
Pallinghurst CEO Arne Frandsen said that with the APG commitment, the company had raised more than $1.5-billion, and had invested more than $500-million of mainly foreign funds into the South African mining industry over the past 18 months.
“We will continue to focus on attractive, sustainable and socially responsible investments, which will not only provide our investors with superior returns but also benefit all our stakeholders,” he said.
The APG investment represents the second recent commitment by a long-term blue-chip foreign investor into Pallinghurst and Platmin, following the $100-million committed by the Singapore sovereign wealth fund Temasek in March 2010.
In a separate statement Temasek, this week announced it would apply for an additional $50-million allotment in the upcoming equity placement by Platmin, increasing its commitment to Platmin to $150-million.
“This commitment, taken together with that made last month by Temasek, gives Pallinghurst additional financial strength in the evolving resource sector,” Gilbertson said.
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