Investing Into Private Equity for African Institutions

LAGOS (Capital Markets in Africa) – Institutional investment is a key driver of the development of capital markets. But, in many parts of Africa, institutional investment has been slow to develop and development finance institutions (DFIs) have long filled this gap. In recent years, pension reform in many countries has driven the creation of more reliable forms of savings for individuals. While the assets in African pension funds are still relatively small, most are fast-growing, creating local pools of capital for investment.

The traditional pension system works on the premise that members are formally employed, work for 40 years and contribute regularly during this period, resulting in suitable retirement savings. However, an issue that continues to impact the growth of pension fund assets is that in many countries much of the population is employed in the informal sector.

Looking at sub-Saharan Africa, for example, retirement remains the preserve (and luxury) of the few employed by the formal sector. For most, working well past the ‘traditional’ retirement age of sixty-five is a norm. The United Nations Department of Economic and Social Affairs reports, among those Africans above the age of sixty-five, 52% of males and 33% of females were active in the labour force in 2015. The reality is that the majority of older persons in sub-Saharan Africa have no choice but to continue to work for as long as they are physically able, due to the absence of adequate savings.

An extract from the INTO AFRICA September Edition: Gauging 2018 Africa’s Outlook. To read full article, please download by clicking: INTO AFRICA PUBLICATION: September  2018 EDITION.

Contributor’s Profile
Heleen Goussard has over 14 years’ experience, and heads up the RisCura team who provides unlisted investment services for clients across all alternative asset classes such as Private Equity, Infrastructure and Private Debt. In this role, she provides assurance and advice to investors in alternative assets and alternative asset funds including independent valuation, financial modelling, risk and performance reporting and research. This ensures that institutional investors receive accurate reporting and assessment of returns on investments, which in turn allows them to manage their investments more effectively. She joined RisCura in 2012 and has performed and reviewed over 150 valuations since then. She previously worked as a corporate finance partner at PKF Inc.