Exposure to alternative investments like art, wine and cars only changed 9% in the past year for Africa’s wealthy compared with a global average of 29%, according to the 2018 Wealth Report published by Knight Frank, Standard Bank Wealth and Investment’s global property consulting partner.
With less than a year until the end of Article 50 talks between the UK and EU – the future remains uncertain. Recent progress is welcome but detailed negotiations on the big issue – the UK’s future relationship with the EU, including market access – have only just begun. This could present opportunities to African investors but also risks that need to be mitigated.
Revised regulatory allowance for African investments can be a lucrative opportunity for pension funds, says Brett Mallen: Acting CEO, Sanlam Africa Investments
The 2017 African Economic Outlook predicts that Africa’s average growth is expected to reach 4.3% in 2018. The private equity (PE) and venture capital industry in Africa continues to witness strong performance across diverse sectors. Returns to investors are expected to remain strong with considerable growth in robust asset classes such as infrastructure, which provides stable, long-term cash flows. Despite the prevalence of lucrative deals, investors in Africa face high transaction costs stemming from unique risk factors, such as exposure to market volatility, as well as political and credit risk. The insurance and credit enhancement products required to offset these risks lead to higher transaction costs.
Environmental Social Governance (ESG) awareness must be spread through all industries, business sectors, and geographical regions if we are to achieve better qualitative development in those emerging markets that need it most. For Africa in particular, scrutinizing business activities for ethical behavior is particularly important, given the sensitive history of this region rich in natural resources. But in Africa and around the world, there is little doubt that the growing importance of ESG is a powerful and even irreversible trend.
Sustained commodity price growth and reduced costs are combining new technology trends with synchronised global growth to present Africa’s mining sector with the best prospects in over a decade.
In Africa today, local capital markets, domestic institutions and favourable demographics are converging. This is seeing many countries take control of their own investment and growth agendas.
The economy is expected to rebound in 2018 following a difficult 2017. Some of this rebound will trickle down to the Real Estate market but developers and property owners should not expect things to normalise immediately. In this instance, where should Real Estate Investors focus their attention in 2018? The year 2017 saw a significant reduction in consumer spending and both local and international investment. This slowdown was largely due to two factors: the prolonged presidential election, and a legislation driven slowdown in lending.
By Aditi Khimasia (pictured), Senior Associate, and Dominic Rebelo, Partner, Anjarwalla & Khanna
It seems 2017 flew by at a blinding speed. At the end of last year, we were wondering what a Trump presidency would look like. Now, the first year of Trump’s term in office is nearly behind us. Unexpected election outcomes left us reeling in 2016, and 2017 has certainly proven no less turbulent.
Blockchain refers to a distributed or decentralised public ledger or database of records of executed and shared digital events among participating parties. When persons transact in a blockchain system, a public record of all transactions is automatically generated and are visible to all participants which increase trust and reliability since participants can access the transactions from different nodes if one-point node fails. These transactions are verified by computers using sophisticated algorithms to confirm transfer of value and create a historical record of all activity which are impossible to change thus it contains an accurate and verifiable record of each and every transaction ever made which reduces opportunity for fraud.
Infrastructure as an asset class can provide a distinct addition to African pension and investment portfolios and is increasingly being considered.
Africa’s has the potential to become the next private equity hotspot. Merely looking at the energy infrastructure sector, “600 million Africans are not connected to the electricity and public investment will not be sufficient,” says Graham Sheward, Managing Director of SGG Mauritius.
When it comes to investing, the quote above from Albert Einstein is extremely apt; especially today, when many investors are concerned about where future returns will come from.