African pension funds are hesitating to invest via local
private equity (PE) while their counterparts in developed
markets continue to pour into the region, recent limited
partner (LP) surveys have revealed.
Five years have passed since South Africa liberalised
restrictions on pension managers’ ability to
mobilise funds through the continent’s nascent PE
industry. Yet a
regional trade body report has found that only 21% of the
country’s pension funds have increased their PE
allocations since the rule changes, and two-thirds still have
no exposure to PE at all.
It amounts to a sizeable missed opportunity, with some
estimates that African pension funds could invest a further
$29 billion in PE. With regulatory hurdles removed, the burden
has now shifted to sponsors themselves.
"The private equity industry has to understand the needs and
concerns of the spectrum of stakeholders who play an
influential role in the allocation of capital...