MFW4A Hosts Roundtable on Local Investors and Long-term Finance in Africa
MFW4A Secretariat and the Africa Pension Funds Network hosted a Roundtable on the theme “Local Investors and Long Term Finance in Africa: Developing the Buy Side”.Pension funds and other institutional investors play a critical role in long-term finance and capital markets through the mobilization and allocation of long-term savings to support investment. With assets under management (AuM) by African pension funds expected to increase to $1,098 billion by 2020, up from $293 billion in 2008, there is increased interest in the role they can play in funding long-term investment on the continent. Despite this growth, and an improving regulatory environment, the majority of African pension assets remain invested in government securities and other short-term assets. Some work has been done to understand the regulatory and capacity barriers that African institutional investors face. However, there is little understanding of the factors that drive their investment objectives, and there is often a mismatch between products offered to Africa's institutional investors and their investment needs. Significant untapped potential remains to further diversify portfolios and contribute to long-term finance in Africa. It is in this context that the Making Finance Work for Africa (MFW4A) Secretariat and the Africa Pension Funds Network hosted a Roundtable on the theme "Local Investors and Long Term Finance in Africa: Developing the Buy Side", in Nairobi (Kenya) on 26-27April 2017. The event brought together over 40 representatives of African pension funds, Development Finance Institutions (DFIs), pensions regulators and long-term finance experts to:
- Identify and discuss the key drivers behind investment decisions of African institutional investors, in terms of risk appetite, asset class and sector;
- Explore how domestic institutional investors, DFIs and international investors can work together to design and structure solutions, and the support required from other stakeholders; and
- Foster co-operation and exchange of best practices amongst African institutional investors and DFIs.