Browsing: private equity

How pension schemes can benefit from PE investment

Investing

The Guide mainly covers three key areas – understanding the asset class and where it sits alongside other asset classes, why and how to invest in PEs and an overview of the benefits and risks of investing in PE.

The development of the guide was informed by a market study report that sought to investigate the low uptake of investment by pension schemes.

In Kenya, for instance, PE allocations by pension schemes account for only 0.08 per cent of the total industry assets under management. From a regulatory perspective, there are provisions allowing pensions to invest in PE funds across East Africa (Kenya, Uganda, Rwanda, Tanzania, and Ethiopia).

According to Kenya’s pension regulator, the Retirements Benefits Authority (RBA), though the country has had regulations that provide for diversification of pension funds away from traditional instruments, most pension schemes are still predominantly bond and stock investors.

Alternative real estate investments for the retail investor

Industry and Trade

One of the features that make the property unique as an investment is that it has a high unit value in comparison to other investments.

A nominal amount like ZWL$1,000.00 can buy an individual investor shares of a publicly listed company on the ZSE and the same amount in US dollars can purchase a decent number of shares through an offshore brokerage account.

This is not usually the case with real estate. There is very little an individual investor can do with ZWL$1,000.00 in terms of direct property investment, at least in the conventional sense.

Even with access to mortgage finance, an investor will also tend to be limited by their credit standing in terms of the funds that they can deploy into property investments.

Exit Strategy: private equity sphere

Africa

Africa’s private equity landscape continues to attract investment. The operating environment, albeit still turbulent, continues to improve. Granted, the pace of improvement is higher in some countries than others, but overall there is promise of a conducive climate for business. 

The enabling environment, coupled with the accelerated digital infrastructure growth, inspires momentum in the private sector contributing to the growing middle class. This will, in turn, lead to improved employment opportunities.