By Simon Clark | From Wall Street Journal

African pension funds have $29 billion available to invest in private equity firms that are seeking to buy stakes in companies across the continent, according to a new report.

The African pensions industry is expanding as populations and incomes grow. Private equity is well-suited to Africa, where many closely-held companies need longer-term financing to expand, according to the report from a group of organizations including Washington’s Emerging Markets Private Equity Association.

“The majority of African businesses aren’t listed on the public markets, so private equity is an ideal way for pension funds to tap into growth,” EMPEA’s Nadiya Satyamurthy said in an interview.

The survey of pension funds in 10 countries from South Africa to Rwanda and Nigeria estimated they have total assets of $379 billion. About $35 billion of that is for private equity, though just $5.7 billion is currently invested in the asset class, leaving about $29 billion available, according to the report.

Private equity investment in Africa increased to $1.8 billion in 2013 from $1.5 billion the previous year, with Sub-Saharan Africa ranked as the most-attractive emerging market for global institutional investors for the first time in 2013, according to the EMPEA.

But much of the interest has yet to translate into capital commitments, with investors who visit Africa bringing “their notebooks, not their cheque books,” the report said.

Read more at Wall Street Journal