Kwabena Boamah, Managing Director of Stanbic Investment Management Services Limited, is urging Ghanaian pension funds to adopt a more structured and strategic approach to investing in private equity, citing policy gaps, governance issues, and a lack of specialized expertise as key barriers to unlocking significant capital in this asset class. Boamah delivered these remarks at the 2026 Annual Conference of the Ghana Venture Capital & Private Equity Association (GVCA) in Accra.
Context: The Untapped Potential of Private Equity
Private equity offers a pathway for long-term investment growth, often yielding higher returns than traditional asset classes. However, it also comes with higher risk, illiquidity, and requires deep due diligence. For pension funds, whose primary objective is to secure the retirement savings of their beneficiaries, investing in private equity necessitates a robust framework to manage these risks effectively.
Barriers to Adoption
Boamah highlighted that while there is growing interest among trustees in private equity, the actual participation remains slow and inconsistent. He stressed the need to move beyond mere interest to active, policy-driven engagement. A significant hurdle identified is the absence of specialized expertise within many trustee bodies. This capability gap prevents thorough evaluation of private equity opportunities.
Many trustees are presented with summarized investment outcomes rather than the detailed financial models and underlying assumptions. This lack of transparency inhibits their ability to critically assess potential investments and build the necessary confidence.
Policy and Governance Challenges
Another critical issue Boamah pointed to is the weakness or absence of clearly defined investment policies. He observed that many pension funds treat alternative investments like private equity on an ad hoc basis. This reactive approach contrasts with a proactive, strategic allocation framework that defines target allocations for such asset classes.
Furthermore, the structure of investment committees can become a bottleneck. Overly centralized decision-making means that a single dissenting voice can halt promising transactions. Boamah advocated for investment committees to foster balanced discussions and avoid gatekeeping tendencies that stifle progress.
Alignment Between Trustees and Fund Managers
On a technical level, Boamah emphasized the crucial need for alignment between trustees and fund managers, especially when assessing private equity investments. He noted a common divergence in focus: trustees often concentrate on individual deals, while fund managers prioritize the overall quality and governance of the fund manager, known as the General Partner (GP).
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