In its third year in a row, PIAfrica 2019 offered a solid platform at the Hilton Mauritius Resort & Spa from March 20-21, for pension funds, hedge funds and private equity funds to meet with institutional investors to discuss the latest asset allocation funds, and trends. The conference highlighted possible opportunities in the African landscape and trained participants on portfolio diversification.
Addressing delegates at the opening ceremony, Mr. Mahad Ahmed, Managing Director, AME Trade, organizer of the PIAfrica 2019, shares that this 3rd edition brings together more than 45 speakers and experts. PIAfrica 2019 attracted a total of 180 delegates from more than 20 countries, including 118 foreigners in a spirit of multilevel professional exchange. Mr Ahmed stated that Mauritius has established itself as a facilitator for doing business in Africa and as an international financial center for the region and thanks the partners the Economic Development Board (EDB), Financial Services Global Finance Commission (Mauritius), and the support New Partnership for Africa’s Development (NEPAD).
Taking turns to speak, the partners of PIAfrica 2019 including Bronwyn Corbett (CEO, Grit Real Estate Income Group), Vishal Joyram (Head of Markets, Barclays Bank, Mauritius), Admassu Tadesse (President, Trade & Development Bank), Constantin de Grivel (Managing Director, AXYS Investment Partners), Sanjeev Gupta (Executive Director, Financial Services and Africa Finance Corporate) are equally convinced that Africa presents more than ever the opportunities for pension funds and alternative investments.
When it comes to pension funds and alternative investments in Africa, there is exponential growth in assets under management. Pension funds over the last few years have been growing at a rate of up to 30% with a pool of around $379 billion in assets. African governments are showing more and more interest and have actively begun interacting with pension funds in raising funds and in financing public private partnership projects. However, with the low return environment that is being experienced globally, a completely new world is unfolding for pension funds that will require more adaptive investment, risk management and analysis.
Francois Guibert, CEO of the EDB elaborated on the fact that this annual event brings together a number of decision-makers, professionals and experts from the pension and management fund companies. active, especially those operating throughout Africa. “Mauritius is the ideal platform to meet the needs of individual pension funds and their investments. The island remains a thriving business platform,” he said. To overcome this perception, the EDB is working to put in place a coherent and integrated “Country Branding” strategy.
PIAfrica 2019 was a forum where participants could meet and initiate business discussions through networking opportunities. The whole event covered various aspects of pension funds and alternative investments such as regulatory developments in Africa, insights from mega funds, preserving and growing capital by insulating investments against market stress, setting up of offshore investment structures, ensure the growth of the portfolio of a pension fund, reducing risks to Improve Pension Investment in Infrastructure in Africa, round tables on modern governance or the structuring of pension funds and many more.
Sharing thoughts on the outcome of the event, Sanjeev Gupta said: “A common realization is that Africa’s savings must develop the real economy and help in development and job creation. We have noted a good turnout with pension funds to explore alternative asset classes, plus, development finance institutions like Africa Finance Corporation and Trade & Development Bank are showing their keenness to work with pension funds and finding ways of mitigating risk for infrastructure projects.”
Similarly, Vishal Joyram shares, ” PIAfrica is a great opportunity for leading pension funds, regulators, asset managers, financial advisors, and other stakeholders from Africa to come together and engaging in alternative strategies. Given the current low return environment that prevails globally, pension funds are required to revisit their investment strategies. This third edition of PIAfrica was a great opportunity for leading pension funds, regulators, asset managers, financial advisors, and other stakeholders from Africa to come together and defining alternative strategies.”
He went onto add that, “Today, Absa Group stands ready to help customers take advantage of the economic climate, and identify and capitalize on trade and investment opportunities that are emerging in the region. Among others, we help customers with hedging solutions in local currencies due to volatility of those local currencies. We are confident that our deep understanding of Africa’s economic landscape will allow us to meet the needs of a full range of banking solutions that are fit-for-purpose.”
During panel discussion session on topics such as Regulatory Developments in Africa and LTIs investing int he real economy, various ideas, suggestions and opinions were put forward. Kishen Sukdev, chief executive officer of the Government Pensions Administration Agency, South Africa stated: “When we talk about regulatory developments, in South Africa we have default options for funds. 80% to 90% will cash those in. We do have challenges with financial literacy, cashing in on a pension fund on the positive side. Africa is growing in terms of regulatory developments and on that note, in South Africa, a legislature was launched recently. When we talk of trends, we have a young and fast growing population. There are difficulties in terms of record keeping, the main challenge is to attract the informal sector.”
Mr Sukdev further added, “Investments are a very critical component. It’s a tricky one from a regulatory point of view. It is difficult for a trustee to know what is happening in that entity. It is not always practical to know the defaults because you are tracking numerous things, for instance, the impact of the fund. We work on the exposure of the assets, that is how we know the impacts. Plus, now, only the mega funds can afford to take risks, the smaller pension funds will not. When i speak of Africa, I know that we are on the right trajectory. We need to make the right choices, we need to make proper diversification if not there is a chance for huge risks.”
Sharing similar views, Lovisa Indongo-Namadja, Manager Pension Funds and Friendly Societies of the Namibia Financial Institutions Supervisory Authority (NAMFISA) said: “In Namibia, pension coverage is about 28%. A regulatory development is mandatory for all construction workers for eg. We have set up a National pension fund which includes medical. The challenges in Namibia are very much similar to South Africa. The informal sector its very hard to get through, moreover, as a regulatory we need to create a controlled environment. In Namibia, we allow our pension funds outside the borders for alternative investments. We have also brought in enough on the types of funds allowed because we give them a exposure limit. But, now, I feel we must diversity and I hope we will be able to come up with a system for pension funds and retirement.”
talking about LTIs investing in the real economy, Mohan Vivekanandan of the Development Bank of Southern Africa (DBSA) mentions about project development, “A bank can never own a small project. At DBSA for instance, currently we have invested in two hydro projects which are around $5 million. When you have a good equity sponsor, things fall in place, but having said that, liquidity is always an issue. We have to start looking at project development positively, when you have good performance then the credibility follows.” Additionally, Trade and Development Bank chief, Admassu Tadesse has also mentioned that Africa has a growth strategy and various prospects for drawing more investment. He has managed to bring in a number of institutional partners as shareholders to support TDBs growth, including African pension funds and insurance companies.
The PIAfrica 2019, as a whole, saw the pooling together of many high profiled intellectual resources in the space of social security across the continent to discuss investment topical issues which has inspired a shift in the thinking on the approach to this subject. To further bring more opportunities in the future, do look forward to the fourth edition of the PIAfrica which has already been scheduled to take place next year in Mauritius from March 25 to 26.
Source: Platform for Africa