Sanlam launches urgent job-preservation initiative in response to COVID-19
Sanlam Investments is responding to the COVID-19 pandemic through large-scale support of the recovery of South African companies, from small enterprises to corporates that employ a large number of people. Sanlam has committed R2.25 billion of its own capital to seed three funds with the core objective of preserving and creating jobs ̶ in a drive to mobilise further capital from like-minded investors set on re-igniting economic growth.
The three impact funds, named the Investors’ Legacy range, share the common goal of backing companies negatively affected by COVID-19, but which have a strong likelihood of producing sustainable cashflows after the pandemic should they receive the required financial support. Each fund focuses on a different part of the market – SMEs, mid-market and large corporates – and will provide financing in the most appropriate form, whether it be in the form of loans or equity investment.
To Sanlam, people matter most and every job in South Africa counts. Economists estimate that, depending on how long the lockdown continues, we could have 3 to 4 million people losing their jobs, pushing the unemployment figure to close to 50%. The Reserve Bank revised its GDP forecast to a deeper contraction of the economy at -7.0% for 2020, while some private sector economists suggest that -10% is more likely. The other difficulty in South Africa is that we entered COVID-19 in a recession and we may be harder hit than other countries as a result. Providing funding to struggling South African companies can prove to be just the lifeline these entities need to pull through the COVID-19 crisis and save jobs.