Mr Kwabena Boamah, Managing Director of Stanbic Investment Management Services, has emphasized the importance of pensions scheme towards developing the Ghanaian economy. He shared this sentiment at the ‘3rd Ghana Impact Summit’ organised by Impact Investing Ghana in Accra.
Speaking on a panel discussion on the topic “Understanding Investor Perspectives: Key Criteria Limited Partners (LPs) Seek in Fund Managers”, Mr Boamah highlighted the key role pension schemes play in the development of the Ghanaian economy.
“If you look at the investment guidelines for pension schemes, there’s a fourth objective that requires pensions to support the development of the Ghanaian economy. We believe that there is no better way to impact the Ghanaian economy than having direct investments in the real sector. After funding government for more than 10 years through pension schemes, there are no pension schemes clearly marked on any government project as being a key sponsor of those projects. But if you have pension schemes, investing in private equity firms, we get the opportunity to physically see where the resources are being channeled to get the impact that pension schemes are making as far as the development of the Ghanaian economy is concerned.”
“When the management of pension funds started in 2012, significant allocations were made into government treasury bills. And as the yield curve corrected, we saw a switch into government of Ghana bonds. In 2016, we felt that there was a need to diversify the pension portfolios further and that was when the conversation around moving into alternatives started. That initiated the first investment on behalf of our pension clients in private equity investments.”, he added
Mr. Boamah further spoke on behalf of his outfit the basic principles they look at before investing in private equity firms.
He said, “The basic principles we look at when investing in a private equity firm includes the following: the people, the process, performance and the pipelines. The people factor is crucial because you are putting money into a fund or an investment that will last you 10 to 12 years. Do they have the entrepreneurial spirit that will be able to add value to the investee companies that the Fund will be investing in? We look at the track record, which we call the performance of the fund manager and how long they have been investing, what have been their success stories and what have been their failures. We also look at the processes. We believe that to be successful is important, but to be able to repeat your successes is more important. Therefore, we take a careful look at how they arrived at their former success and if they are capable of replicating it over the years.”
Impact Investing Ghana hosts the Ghana Impact Summit in partnership with the UN In Ghana, Global Steering Group for Impact Investing, and other partners. The summit provides a platform for the Ghanaian ecosystem (suppliers of capital, policy makers, enterprise support organizations, market builders) to make significant progress on local ecosystem-building initiatives that can increase the supply of funds for impact and drive the attainment of the SDGs.
