U.S. Pensions Look to Tap African Growth

Africa’s economy grew 5 percent in 2014, and it’s expected to replicate those numbers through 2017, according to the World Bank.

Some of the U.S.’ largest pension funds are eager to make that growth work for them.

From the Financial Times:

The $9.3bn Missouri State Employee’s Retirement System (Mosers) has for the past few years put money into private equity funds in Africa run by both Actis, which invests in Asia and Latin America as well as Africa, and Development Partners International (DPI), which focuses on Africa. Both private equity firms make investments that tap spending by the continent’s consumer class, from companies that provide healthcare and education to expanding electricity supply and shopping malls.

Big US pension funds such as the $180bn New York State Common Retirement Fund and the $107bn Washington State Investment Board are also putting their money to work in Africa.

“We’ve seen a huge increase in interest in . . . Africa in the past 18-24 months,” says US-based Adiba Ighodaro, partner for investor development at Actis, which has raised money from both Mosers and Washington State.

Ms Ighodaro has taken US investors on a number of trips so they can see for themselves the growth on the ground.

“They come away with a . . . totally different perspective. Look at Nigeria, Nairobi and what’s been going on — the growth in consumption, the investment opportunities are practically tangible. You just have to drive around and you can almost touch and feel it; it’s a very important part of the process.”

Some South African PE funds raised a record $4.7 billion in 2007. They’d raised $3.1 billion through the first half of 2015.