Alternative Investments
Private equity, private credit, and real assets for sophisticated African investors.
Listed equities and bonds form the core of most investment portfolios, but they are not the whole picture. Alternative investments — private equity, private credit, hedge funds, infrastructure, and real assets — offer diversification, reduced correlation with public markets, and the potential for enhanced returns. For African investors with longer time horizons, alternatives can be a powerful portfolio component.
What Are Alternative Investments?
Alternative investments are any asset class outside of traditional listed equities, bonds, and cash. They include private equity (investing in unlisted companies), private credit (lending directly to businesses outside the banking system), hedge funds (strategies that aim to generate returns regardless of market direction), infrastructure (roads, power plants, telecoms), and real assets (commodities, farmland, timber).
These asset classes have historically been available only to institutional investors — pension funds, endowments, and sovereign wealth funds. Today, through carefully selected offshore platforms and fund structures, individual investors with sufficient capital can access the same strategies.
Why Alternatives Matter for African Portfolios
African investors face a particular challenge: local stock exchanges are small, illiquid, and concentrated in a handful of sectors (typically banking, telecoms, and mining). Adding alternatives to an offshore portfolio provides genuine diversification — exposure to asset classes and return drivers that behave differently from listed markets.
Private credit, for example, generates steady income from direct lending to mid-market companies. This income is largely uncorrelated with stock market movements. Infrastructure investments provide inflation-linked returns over very long periods. Private equity offers the potential for outsized returns from investing in growing businesses before they list publicly.
We typically recommend that alternatives comprise 10–25% of a client’s total portfolio, depending on their liquidity needs and risk tolerance. These are long-term allocations — most alternative investments have lock-up periods of 3–7 years.
Our Selection Process
Not all alternative investments are created equal. The dispersion of returns between top-quartile and bottom-quartile managers is far wider in alternatives than in traditional asset classes. Manager selection is therefore critical.
We conduct rigorous due diligence on every alternative investment we recommend. We assess the manager’s track record, investment process, team stability, fee structure, and alignment of interests. We only recommend managers with institutional-grade governance and a minimum five-year track record. We never recommend alternatives for the sake of complexity — only when they genuinely improve the risk-return profile of your portfolio.
Next step
Every strategy begins with a conversation. We would welcome the opportunity to understand your circumstances and show you what is possible.
Key Facts
10–25%
3–7 years
$25,000+
PE, Credit, HF
Institutional
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