Devising niche investment strategies: How Stewards meets the unique needs of investors
May 29, 2025Devising niche investment strategies: How Stewards meets the unique needs of investors
May 29, 2025Diversification beyond traditional assets and the role of alternative investments by pension funds in Africa.
June 2025
By Dr. Leslie Ndawana, Principal Executive Officer, National Fund for Municipal Workers
Historically, African pension funds have been viewed primarily as mechanisms for providing financial security in retirement, investing mainly in traditional asset classes such as government bonds, equities, and cash. However, this narrow approach overlooks the transformative potential of pension funds, and in recent years, the pension fund landscape has evolved to reflect a growing awareness by the fiduciaries and asset managers that financial markets can significantly influence social and environmental trends and vice versa. Beyond simply providing retirement income by optimising financial returns, pension funds are increasingly considering socio-economic imbalances and broader societal needs when assessing their purpose and creating suitable investment portfolios to achieve that purpose.
To unlock and embrace a multi-purpose model, pension funds need a reorientation of strategy (both from a business and investment perspective), blending traditional asset classes with alternative investments. These include private equity, private debt, mezzanine debt, unlisted property, commodity-trading strategies, hedge funds and other unlisted assets. Each of these broad categories can have multiple underlying investment strategies to improve returns, diversify risk and positively impact society through the underlying investments.
In essence, pension funds can follow a triple-purpose strategic approach, where (1) financial goals are increasingly aligned with (2) positive socio-economic outcomes, and (3) sustainable growth.
The take-up of alternative investment strategies by African pension funds remains low by global standards, as the complexity of these types of investments seems to be a limiting factor. It seems many African countries face significant challenges in pension fund governance and accountability, a lack of political certainty, and compromised institutional strength, such as the independence of courts. This negatively impacts capital allocations to alternative assets which involve intricate long-term legal structures.
Looking ahead, African pension funds have a crucial role in Africa's sustainable development by investing in projects that align with the United Nations Sustainable Development Goals (SDGs) and the African Union's Programme for Infrastructure Development in Africa (PIDA). Capital allocations into alternative assets are expected to increase as pension funds look beyond earning a financial return, but also to directly and meaningfully impact the communities in which they operate.
Africa is on a distinct economic and social development path compared to the rest of the world, requiring tailored alternative solutions to address its unique challenges. African pension funds have the potential to become a key driver of sustainable economic development in Africa for decades to come. As new challenges arise, they will need to adopt innovative thinking and flexible investment strategies to meet Africa's ever-evolving needs.
About Stewards Investment Capital
Stewards Investment Capital is a boutique investment advisory firm with a track record of over 25 years under the Stewards Group of Financial Companies. Strategically positioned in Mauritius, South Africa, and the USA, we tailor niche investment solutions to high-net-worth individuals and institutional investors.
Guided by a high-alpha approach and fuelled by a passion to be a catalyst for growth, our commitment to our investors is rooted in our mission to grow and nurture their wealth, building lasting fortunes and creating enduring legacies to achieve real freedom. This endeavour is powered by our team of passionate investment professionals, each contributing decades of experience and expertise to our firm.
For further information about Stewards Investment Capital, please visit stewardsinvestment.com/
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Suneeta Motala
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Forbes Communication Council Member
Email: suneetamotala@stewards.global, thestewards@stewards.global
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