Economy needs patient capital to reset – Tesah Capital MD

Eugenia Basheer, MD, NDK Capital

Current challenges confronting the country present a great opportunity for investment advisors and fund managers to assist and contribute to resetting the economy by leveraging patient capital, Managing Director-Tesah Capital, Eugenia Basheer, has suggested.

Madam Basheer spoke to B&FT on the 2023 Money Summit’s sidelines, and maintained that the current economic situation is a chance to get it right in making key investment decisions which will turn things around with access to long-term capital and funding.

“We must be able to drive sustainable economic development by investing in the real sector; in areas including infrastructure, education, health, environment, governance etc. This is the only way to drive sustainability,” she indicated.

Speaking on the theme ‘Africa’s robust financial sector: the catalyst for a sustainable economic growth’, Madam Basheer said bank loans cannot entirely be relied on to fund key investments, as banks only help in funding short- to medium-term projects – unlike patient capital, which helps nascent businesses to go through the growth process.

This is where investment advisors and fund managers come in to help those who need this capital, she said, adding: “Investment advisors and fund managers must be able to assist those who need this capital to organise themselves and structure products that can sell on the bourse through listing to acquire equity among others”.

The Tesah Capital chief explained that investment advisors must also widen their cooperation and work with those who have the funds and possess resources, and are seeking investment avenues.

With investors currently sceptical about investing in government-related instruments, Madam Basheer said this is the time for investment advisors to guide and drive resources and fund-holders to invest in the real economy.

“Fund managers and advisors must go out there and guide people who need the money and help them to structure products, while convincing them to invest in the real economy. When that grows and the economy as a whole grows, the benefits are enormous – this is the surest way to get out of the situation we are in now,” she said.

Indeed, pension funds per their allocation by law have not maximised their potential for growth. Madam Basheer however believes this is reason why the industry should channel these funds toward the real sector.

With industry questioning the foresight of regulators for not envisaging the recent economic situation and putting in place mitigation plans, Madam Basheer said: “Regulators cannot entirely be blamed, as the pension industry was young and rules were being fashioned-out in phases”.

She disclosed it would have been more chaotic if the regulator had from day-one said pension fund managers could invest in any part of the economy, adding: “Safety of pension funds was the primary decider in what the regulator did at the beginning”. 

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