This archive report was first published on 16 October 2019.
On October 16, 2019, Financial Sector Deepening Africa (FSD Africa) released a market report that shed light on the private equity investing landscape for pension funds in East Africa.
The report found that globally, private equity has experienced rapid growth, largely due to support from pension funds. However, in East Africa, private equity firms receive minimal funding from pension schemes.
The report attributed the slow uptake of private equity investment by pension funds in East Africa to a knowledge gap. This gap hinders pension funds from making informed investment decisions, particularly when it comes to private equity investments that often require large sums of money.
According to the report, pension funds' investment decisions are influenced by factors such as the size of their funds and their risk perception towards private equity investments. The report noted that private equity investments are often perceived as high-risk and provide a shorter time frame, typically less than 60 months.
To address this knowledge gap, the East African Venture Capital Association (EAVCA), FSD Africa, and the International Finance Corporation (IFC) developed an investment guide for pension scheme trustees. This guide aims to serve as a reference tool for decision-making and will help East African pension funds make informed investment decisions in private equity.
