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U.S., Kenyan, and South African Pension Funds Commit Over $94 Million to African Private Equity & Infrastructure

  • Kenya, South Africa
  • Infrastructure

The Challenge:

African economies are  some of the fastest growing in the world and the continent is home to a booming population that’s young, urban, and increasingly connected. Along with these developments, household incomes and consumption are also projected to rise, driving demand for improved and expanded infrastructure throughout every region on the continent. 

At the same time, U.S. public pensions funds are facing a funding crisis.  As more U.S. workers retire, pension contributions and retirement returns are not keeping pace with payout needs. For institutional investors looking to deliver excess investment returns, African infrastructure assets and their inflation-resilient returns represent a promising mutually-beneficial opportunity.

“The consistent growth of African economies and populations is fueling the demand for new and improved services and infrastructure in major sectors, such as energy, telecommunications, and financial services. We are very pleased to create mechanisms and solutions by which African and U.S. institutional investors can collaborate to fund these high-growth sectors while achieving attractive risk-adjusted returns.”

Aymeric Saha CEO of MiDA Advisors

Read our Q&A with Aymeric Saha

Our Solution & Impact:

Prosper Africa is tapping into the $380 trillion in global institutional assets (pension funds, insurance companies, endowments) to drive investment in Africa.

The U.S. Agency for International Development (USAID) recently used $2.5 million in foreign assistance funding to mobilize over $1 billion in institutional investor capital into Africa and other emerging markets, leveraging $400 for every $1 of U.S. Government spending. We are now scaling up this work as part of the Prosper Africa initiative.

To achieve this impact, USAID and MiDA Advisors used dedicated Prosper Africa funding to spearhead a campaign to educate and engage institutional investors. The campaign included U.S.-led investor delegations to the African continent, a virtual roadshow for U.S. and African asset owners, and ongoing market research to help asset owners better evaluate the opportunities and risks in investing in African infrastructure.

Recently, a group of U.S. and African pension funds added to these results by committing over $94 million into two Africa-focused funds: African Development Partners III (ADP III) and Everstrong Kenya Infrastructure Fund (EKIF). These co-investments will support economic development and resilient infrastructure across the African continent while offering investors risk-adjusted returns.

“Consistent with our efforts to enhance returns and increase the diversification of our investments, we look to Africa and funds like ADP to help us achieve those goals. Because this was our first investment in Africa, we did extensive diligence before making our investment. We couldn’t be happier with our decision to invest [into the DPI ADP III Fund].”

Adam M. Cloud Treasurer of the City of Hartford

Advised by Development Partners International, ADP III is a $900 million fund and one of the largest funds dedicated to investing global capital into Africa. The fund invests in African companies in critical sectors such as telecommunications, food and agri-business, financial services, education, and pharmaceuticals. New institutional investments into the DPI ADP III Fund include:

  • $10 million from The Board of Trustees of the Public School Teachers’ Pension and Retirement Fund of Chicago
  • $50 million commitment from The City of Philadelphia Board of Trustees
  • $5 million commitment from The City of Hartford Pension Commission, its first investment allocation to Africa.
  • $20 million from The Board of Eskom Provident Pension Fund, one of the largest pension funds in South Africa
  • Additional investments from KenGen Defined Contribution Scheme, Banki Kuu Pension Scheme 2021, U.S. Government Pension Fund, and Old Mutual Umbrella Retirement Benefits Scheme.

Managed by Everstrong Capital, EKIF primarily focuses on equity investments in the energy, transportation, information and communication, water, and social infrastructure sectors in Kenya and other countries in East Africa. New institutional investments into EKIF include:

$9 million from The Board of Trustees of Kenya Power Pension Fund, a pioneer member of the Kenyan Pension Fund Investment Consortium (KEPFIC)

Read our Q&A with Runa Alam