New Frontiers: Perceptions of and allocations to private equity by Southern African pension funds 2016

The Southern African pension funds industry has undergone significant growth in the past decade. In South Africa, the largest market in the region, pension assets are estimated to have nearly doubled between 2004 and 2014, to $234 billion. The ten-year compound annual growth rate (CAGR) of industry assets was 5% for the period in dollar terms; when taken in rand terms, the growth rate is above 10%. In tandem with this growth has come a wave of regulatory change in South and Southern Africa, which has begun to liberalise the ability of pension funds to invest in alternative assets, including private equity. Thus far, take-up of the private equity investment opportunity by pension funds in the region has been slow. To research this issue, SAVCA conducted an anonymous online survey of the top 100 pension funds in South Africa and of the major pension funds in the Southern African Development Community (SADC) region beyond South Africa. This yielded some 39 completed surveys, representing 38 South African pension funds and one Namibian fund.