Investors turn to alternatives for

Alternative Investments in Energy

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South Africa's energy transition is reshaping how investors think about opportunity, risk and impact. In this evolving landscape, Prescient Investment Management, Revego Fund Managers and AlexForbes Investments represent three perspectives on how private capital is driving change, from structured debt and equity participation to institutional investment advisory. Together, they highlight the growing role of alternative investments in bridging South Africa's multi-trillion-rand infrastructure gap and accelerating the shift toward sustainable energy.

Prescient Investment Management defines alternative investments as asset classes outside the traditional categories of listed equities and bonds. The data-driven asset manager's primary focus is on private debt, clean-energy debt and infrastructure debt. "We believe the role of these alternatives has become absolutely critical in today's investment landscape," says Conway Williams, Prescient's Head of Alternative Investments.

"The longstanding 60/40 portfolio model, which relied on the negative correlation between stocks and bonds, has fundamentally broken down," he adds. "Research shows that South African stocks and bonds have been positively correlated nearly 90% of the time since 2000, nullifying the diversification benefits investors once relied on."

In this new regime of higher volatility and uncertainty, Williams says alternatives provide a vital source of uncorrelated returns. They are less exposed to broad market sentiment and derive value from specific, idiosyncratic opportunities, while delivering tangible economic and developmental impact.