The much coveted 7th edition of the Pension Fund & Alternative Investment Africa (#PIAfrica) Conference took place spanning over 2 days on February 28 and 29 in Mauritius in the presence of notable guests such as the Minister of Financial Services and Good Governance Sunil Bholah, Bank of Mauritius (BoM) Governor Harvesh Seegolam, Chief Executive Officer, Pensions and Insurance Authority, Zambia, General Manager – Investments of Kenya Power Pension Fund (KPPF) Amos Ndung’u and Group Executive Corporate Affairs and Investor Relations, TDB Group Mary Kamari, among others.
In his address, Minister Bholah underlined that the conference has stressed pivotal topics such as pension funds, diversification, regulatory compliance, impact investing, and governance framework while lauding the presence of PIA, calling it a strong commitment to pave the way for a resilient and prosperous future in pension fund management and alternative investment.
He remarked, “The alternative fund industry has experienced global turmoil encompassing the ongoing repercussions of the COVID-19 pandemic; instability caused by the Ukraine-Russia war; market volatility; and central banks’ actions to avoid the threat of recession. Fund managers have altered their portfolio by upscaling product weights in areas such as illiquid credit, real estate, private equity, pension funds, venture capital, and opportunistic or special situations coupled with the fact that many of the largest investors are public pensions, endowments, and foundations having their own environmental and social responsible commitments to fulfil.”
In the current context, the Financial Services minister underlined that the jurisdiction faces several challenges in relation to the retirement system where pension funds are suffering from widening deficits on the back of increased longevity risks as well as lower returns arising from the volatile performance of traditional asset classes such as equity, fixed-income, real- estate and cash equivalents.
“The low interest rate environment that has been prevailing over the years since 2009, has severely impacted the performances of investment funds, insurance funds and pension funds, amongst others. As we move forward, there is a need to ensure that these segments are ready to weather the storms and equally capable to partner in Africa’s growth and prosperity. A robust and well-designed financial sector becomes paramount as Africa gears up to harness international resources and foreign investments. And this will not be possible if sustainability is not embedded in this journey,” he underlined.
Minister Bholah referred to the Capital Economics Study conducted in 2021 revealing that Africa as a continent would demand USD 350 Billion to unlock sustainable projects on the continent. Reason why, he says, Mauritius is in the process of creating a dedicated Environmental Social and Governance Framework for Africa where the framework is designed to be a document for Africa by Africa. “In line with realities in Africa, it will provide comfort to investors or Development Finance Institutions (DFIs) that the project is being properly monitored.”
He added that Mauritius as an IFC firmly believes that it can help to drive impactful investment into mainland Africa that calls for the incorporation of ESG principles in projects. “I am hereby referring to projects which can unlock important green funding sources, whilst also contributing to countries’ sustainable development,” he added.
In his speech CEO of the Economic Development Board (EDB), Ken Poonoosamy stressed the fact that Mauritius remains the fund domiciliation centre of choice, boasting of around 1,000 funds, collecting collective Assets under Management in excess of USD 130 billion coupled with a significant number hailing from the development finance institutions and sovereign wealth funds.
He added, “There is a number of global alternative asset managers choosing to set up offices in Mauritius where the jurisdiction is not only reliable, efficient and trusted International Financial Centre of choice coupled with being an excellent place to work, live and play.”
“We are an open economy for foreign talents, with our residency schemes, in particular our occupation and permanent residence permits, allowing investors and professionals, as well as their family members, to benefit from the excellent quality of life. I wish to end by assuring you that the EDB will keep advocating towards uplifting the Mauritius IFC to better serve your purpose,” he reassured.
On the other hand, the BoM Governor Harvesh Seegolam commented: “Mauritius is well poised to be the perfect springboard for headquartering pension funds and alternative investment vehicles as well as providing conditions conducive to investing in mainland Africa.”
He also stressed the many attributes offered by the jurisdiction as an IFC of repute where it subscribes to the highest international standards and practices; Accounts are prepared in accordance with International Financial Reporting Standards and important metrics such as IFRS 9 and Basel III have already been adopted. “We are now gearing up for the adoption of sustainable standards crafted by the International Sustainability Standards Board,” he underlined.
The Governor further added that the jurisdiction can rely on a solid network of both regional and international banks coupled with the fact that the banking sector has always been assessed to be robust, resilient, safe, and financially sound. “We have neither experienced any banking sector turmoil of systemic proportions in our history nor have we faced major hiccups in our payments system operations. Our regulatory and supervisory framework for our financial system is avant-gardist and in line with best practices,” he asserted.
Earlier in his opening remarks, Managing Director AME Trade for the 7th Pension Funds & Alternative Investment Conference, Mahad Ahmed shared his delight to be in Mauritius once again set against the current macro-economic backdrop and told: Despite the challenges faced by Africa, the economy is poised to grow at 4 percent this year.”
He pinpointed this year’s year’s theme, “Reshaping African Markets: Deciphering the Investment Conundrum for Growth” which has been carefully chosen to reflect the current developments taking place in the pension funds and alternative investment industry.
Set against the implications for the African pension funds and in the context of the global macroeconomic outlook characterized by a period of rising interest rates, and supply chain pressures still reeling from the pandemic and geo-political environment which shows that there is a lot for the 54 speakers to unpack. He further said: “The conference serves as an opportunity to deliberate on issues such as anticipated pension funds reforms in some countries, solutions for bridging the gap and accelerating institutional investment in infrastructure, the outlook for the Alternatives in 2024, and investing for sustainable impact, as well the emerging trends in fixed income amongst other themes.”
The 2024 conference was a mammoth gathering seeing the participation of 180 plus attendees hailing from 25 countries where the focus was on the role of Pension Funds to help forge new relationships with the private sector across infrastructure, fixed income, real estate and renewable energy in contributing to Africa’s growth.
