This archive report was first published on 16 October 2019.
On October 16, 2019, the Retirement Benefits Authority (RBA) Chief Executive Nzomo Mutuku called on pension funds to explore private equity as an investment option.
According to Mutuku, investments in private equity account for only 0.08% of the total industry assets under management, making it a largely untapped opportunity.
Speaking during the launch of the Private Equity Investment Guide, Mutuku emphasized the importance of diversifying from traditional instruments such as bonds and stocks.
"As a regulator, we are positive and open to new ideas in broadening pension growth and continue to review the legal framework to keep pace with emerging trends and expand the investment horizon," said Mutuku.
The guide, a partnership between the East African Venture Capital Association (EAVCA), Financial Sector Deepening Africa, and International Finance Corporation, aims to bridge the knowledge gap among pension fund trustees on investing in private equity.
Capital Markets Authority Regulatory Policy and Strategy Director Luke Ombara noted that regulators have created an enabling environment for private equity funds, including safeguarding capital gains when they exit ventures.
"As a regulator, we supported the PE sector in retaining the capital gains tax at five per cent for PE exits. An increase in capital gains tax from five per cent to 12 per cent as proposed by the Finance Bill would create uncertainty in the tax policy environment, affecting middle to longer-term PE investment appetite in the country," he said.
