Africa — dismissed in the United Kingdom media six years ago as “The Hopeless Continent” — is beginning to attract the attention of UK pension funds as an investment destination with substantial long-term potential.
Botswana-registered Imara financial-services group reported this week that its Imara African Opportunities Fund has received its first inflows from a UK pension fund and that British institutions approached by the fund’s London-based marketers receive a generally receptive response from investment strategists taking a five-to-10-year view.
The fund, soon to be listed on the Irish Stock Exchange, contains equities from numerous African markets, including inflation-ravaged Zimbabwe. In addition, economies in various stages of structural reform, such as Zambia, Malawi, Kenya, Nigeria and Ghana, are strongly represented.
Zambia and Egypt were among the world’s best-performing equity markets of 2005. Gains of 125% in United States dollar terms were registered for the year in copper-rich Zambia.
John Legat, Harare-based manager of the fund, pointed out: “We’re delighted to receive our first inflows from a British pension fund. In fact, the thinking of many UK pension funds and their advisers is generally positive and reflects a significant shift from 2000 when the damning ‘Hopeless Continent’ article appeared in a leading British business publication.
“British pension funds believe in international diversification and are quite prepared to take a long view. They see the strategic benefit of a stake in commodity rich markets and are well aware of the value opportunities to be found in astutely selected African equities.
“Pension funds are known for taking a prudent and deliberate approach to investment. The fact that these institutions increasingly see Africa as a sound long-term ‘play’ is encouraging and supports the view that our continent is only beginning to realise its huge potential. The most exciting growth is yet to come.” — I-Net Bridge