Johannesburg - The asset management industry in Africa is set to reach $1.1 trillion (R13.9 trillion) in assets under management by 2020, up from $293 billion (R3.8 trillion) in 2008 and $634 billion (R8.8 trillion) in 2014.
Research released by professional services firm PwC on Thursday said the projected increase represented compound annual growth of 9.6 percent on 2014 levels, and would bring the African share of the global total, projected to be $101.7 trillion by 2020, to 1 percent.
Ilse French, Africa Asset management leader at PwC, told a press briefing the growth was underpinned by increasing demand among Africa’s burgeoning middle classes for everything from consumer goods to pensions and life insurance products.
The flow of private equity funds and direct foreign investment, especially into infrastructure, was also expected to drive demand.
French noted the widespread adoption of technology would make the delivery of financial advice and products cheaper leading lead to increased take up.
The research report, called Africa Asset Management 2020, covers 12 African markets according to varying levels of development: the “advancing markets” of South Africa, Morocco, Mauritius and Namibia; the “promising markets” of Egypt, Ghana, Kenya, Botswana and Nigeria; and the “nascent” markets of Angola, Algeria and Tunisia.
The youthful populations of the 12 countries and surrounding regions are seen as key drivers of opportunity for consumer industries including retail, healthcare and property.
A key area of opportunity for investment is infrastructure.
The reports notes the World Bank estimates that Africa will require a minimum investment of $93 billion over 10 years to close its infrastructure gap. French says asset management companies should be exploring public-private partnerships to fund infrastructure projects.
ANA