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Sunday, December 4, 2022

US pension schemes direct over $500 m to Africa, find co-investment opportunities with Kenyan Pension Funds Investment

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A U.S. institutional investors delegation trip to Kenya and Senegal is taking place this week on a mission to explore opportunities in East and West Africa and facilitate U.S. institutional capital flow into Africa.

It emerged during the meeting in Nairobi today that some of the largest U.S. pension funds and foundations – represented in the delegation – intend to inject over $500 million (Approx. KES 60 billion) into the region. Kenya’s infrastructure, housing, and other high-impact local businesses have been earmarked for co-investment partnerships forged by The Kenya Pension Funds’ Investments Consortium (KEPFIC).

The delegation includes key decision-makers from The City and County of San Francisco Employees’ Retirement System, the Teachers Retirement System of Texas, The City of Philadelphia Board of Trustees (Philadelphia Board), and The City of Hartford Pension Commission among others. The total assets under the management of members of this delegation represent over $1 trillion.

This is the fourth U.S. Institutional Investor delegation trip to different regions in Africa since 2017. The 2019 delegation to Kenya and South Africa included 17 asset owners – pension funds, insurance companies, and endowments—as well as 15 fund managers, bankers, and industry partners. Overall, these trips have resulted in $1 billion in total investment into Africa and other emerging markets.

Local Pension Schemes Accelerate Investment in Infrastructure Projects

This trip will allow members to advance their understanding of the investment opportunities and pursue co-investment opportunities with Kenyan Pension Funds Investment Consortium (KEPFIC) members.  They will also share their extensive experience in U.S. financial markets with local peers, and develop relationships with local financial market executives.

Ngatia Kirungie, KEPFIC Head of Secretariat noted: “Many indicators including the growing middle class and rapid urbanization show that Kenya, and Africa at large, is ready for impactful growth. Since our launch, we have made significant steps in building infrastructure investment capacity and closed several deals through the help of USAID and we believe the new alliances will unlock our next level of investments. The rapid rate of urbanization exposes Kenya’s immense opportunities for investments in power, transportation, and urban development”.

KEPFIC is a consortium of 24 public and private sector pension schemes in Kenya that hold approximately KES 500 billion in assets and has come together to collaborate to make long-term investments in infrastructure, affordable housing, and energy, providing competitive returns and diversification opportunities to members. Since 2020, KEPFIC has evaluated big-ticket infrastructure projects to deploy more than KES 25 billion into transportation, energy, and affordable housing by 2025. Co-investments with U.S. pension schemes can help close Kenya’s infrastructure funding gap of KES 200 billion.

Local Pension Schemes Accelerate Investment in Infrastructure Projects

KEPFIC is supported by the U.S. Government through USAID’s Kenya Investment Mechanism, Power Africa, the World Bank Group, and MiDA Advisors (in partnership with USAID INVEST) and provides an opportunity for beneficial collaboration between Kenyan and American pension funds and other institutional investors.

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