The African LP Community

An analysis of the current composition of Africa LPs within our database, and where we think new sources of LPs will emerge going forward. 

Africa graph

 
 

 

There are currently 65 African institutional LPs profiled within our database, the majority of which are banks, financial services firms, and asset managers. The African Development Bank is one of the most active African financial services firms within private equity, with a current portfolio of $787.5 million.

 

The lack of pension funds and insurance companies investing into private equity funds is a reflection of the lack of experience these institutions have with the asset class, rather than current regulatory constraints. South African pension funds can invest up to 10 percent of their portfolios into private equity, but we only profile six as having invested into such funds, including the Government Employees Pension Fund and the Sentinel Mining Industry Retirement Fund.

 

The prominence of government related organisations as a portion of the total LPs is noteworthy too, suggesting that some local GPs have to rely on government support for their activities. For example, The Ministry of Investment, Egypt, was a cornerstone investor in the Bedaya I fund in 2013. 

 

75 percent of fund commitments made by these institutions are focused on Africa, which suggest that these LPs look closer to home for returns. However, Old Mutual Investment Group (OMIGSA) has committed to managers such as Bain Capital, Carlyle, and Partners Group, as well as the South Africa based Lereko Metier.

 

There is still a lot more capital from African pension funds to be invested in the asset class, following the loosening of regulation over the last few years. Nigerian pension funds for example are allowed to invest up to five percent of total investments into private equity, but only a fraction have invested.

 

In a recent conversation with the Research and Analytics team Kwacha Pension Trust Fund, based in Zambia, said that it expects to commit to private equity funds in the future but currently lacks the necessary understanding to do so yet. It is currently studying the asset class and attending related conferences to facilitate this.