Old Mutual Investment Group is planning to raise about R10bn to further boost its investment across the African continent, said the groups CEO Diane Radley.
Speaking at a media round table yesterday Radley said despite recent political unrest across the continent, Africa is still offering a compelling investment case and will be the great investment story over the next 50 years.
She said the investment planned by the group will be in multiple asset classes including infrastructure, private equity and agriculture funds.
Radley says that private equity will play a major role in the African investment story, particularly for middle-sized opportunities, which currently has low penetration but is likely to present good investment opportunities going forward.
“We will also be looking to raise funds for an Africa-based private equity fund,” she says. “Additional sources of investment will come from domestic pension funds, such as what is now happening in Nigeria, in search of above average long-term yields.”
While notoriously illiquid and high risk, Radley says that there are a number of factors that point to investment opportunity areas across Africa. “Infrastructure neglect that was seen during the post-colonial era is now being addressed in countries such as Nigeria, Kenya and Ghana. Infrastructure, energy, telecommunications and agriculture are widely regarded as the sectors most likely to benefit from the infusion of capital into Africa over the next one to two decades,” she explains.
“Compounding this is the fact that by 2050, one in three youths in the world will reside in Africa, making it arguably the most exciting consumer market of the future.”
“While historically, we saw interest coming mainly from emerging market fund managers, who are accustomed to higher risk environments, we are now seeing interest in Africa from fund managers with different investment mandates, such as pension funds, both passive and active investors, infrastructure funds and private equity.”