WEALTHACCESS Investment Managers, an asset management firm, has taken a huge bet on infrastructure finance as it seeks to move away from the traditional fund management model, which is mainly focused on equities and properties.
The firm has grown its fund to over US$100 million with a project pipeline covering rail, water, roads and energy infrastructure.
WealthAccess was licensed in 2022 and the following year, it was majority-acquired by a Middle Eastern investment fund with interests in infrastructural development and investments.
In an interview, chief executive Takudzwa Mhlanga said, while the strength and efficacy of Zimbabwe’s asset management could not be questioned, WealthAccess was a targeted private equity fund, which would mainly play in the infrastructure space using the expertise within the company, its shareholders and private equity partners.
“We have a strong focus in both finance and engineering and this gives us a technical advantage in our investment approach. We have as many engineers as we do finance people in our team,” he said.
Mhlanga was in the Middle East for the greater part of a decade, where he focused on energy and infrastructure investment.
The firm is chaired by former Reserve Bank of Zimbabwe deputy governor Kupikile Mlambo, who also chairs the Infrastructure Development Bank of Zimbabwe, while other board members include banker Joe Matanga and commercial lawyer Rachael Chibaya.
The company will soon rebrand to Rulethu Investment Managers to reflect the changes in its shareholding.
Mhlanga said the firm aimed to “unleash the potential of infrastructure financing in Zimbabwe” by investing in companies and projects that drive infrastructural development.
“This actually involves strategic holdings in primary industry and trading. Generally, infrastructure funding has long-term performance and is a resilient asset class even in economic downturns,” he said.
“The long-term nature of infrastructure assets, with long-term contracts, would ride out any volatility and would be in a strong position when normalcy returns.”
To fund infrastructure, typically central governments and local authorities are able to raise debt that is meant to be paid back over 30-40 years.
This way, the cost of roads, energy, rail and water infrastructure is broken down over a long period and is, therefore, more bearable.
This is how other countries are able to build.
“However, a lot of African governments, including Zimbabwe, do not have this ability, thus a lot of the infrastructure we see is funded in the same financial period it is executed. It is painful to the government, the taxpayer, ratepayer and we wish to fill this gap,” Mhlanga said.