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VENTURES AFRICA- LeapFrog Investments, a leader in private-equity fund focused on micro insurers in Africa and Asia, has acquired a 25 percent stake in one of Ghana’s largest pension firm, Petra Trust with the expectation of quadrupling growth in the next four years.
This is LeapFrog’s first investment in the African pensions sector, which is forecast to grow 400 percent in the next four years following liberalisation of the pensions market, according to Ekow Fynn-Aikins, regulations officer of the National Pension Regulatory Authority Accra.
Much of this growth is likely to be propelled by the rapid expansion of Africa’s emerging consumer sector, as more households begin to rise into the middle class, a statement released by the company said.
Doug Lacey, the partner who leads LeapFrog’s Ghanaian investment said that the fresh capital injected by Leapfrog into the local insurer would be used to invest in infrastructure, upgrade systems and expand beyond Accra to other parts of the country.
Although Lacey pointed out that it was too soon to say how long LeapFrog would retain investment in Petra, he however noted that “The opportunities in Ghana are enormous as it’s a nascent industry.”
“We look forward to providing support both on the board and operationally to further accelerate Petra’s growth, profitability and impact,” he added.
“LeapFrog’s focus is on the emerging consumer: investing in companies that profitably provide financial safety nets and springboards to people who until now have had no or little access to these products.”
“There is a strong possibility that regional players will start understanding the opportunity in the market and that could potentially impact on how long we hold the investment for.”
Cofounded by Kofi Fynn and Chris Hammond as well as Head of Operations Helena Pokuin in late 2011, Petra Trust is one of Ghana’s largest pension-trustee companies that serve a local market of 20-million consumers in the informal and semiformal sectors, which account for some 90 percent of Ghanaian employees.
Deputy Managing Director of Petra Trust, Chris Adu Hammond said “What is very exciting to me is that going forward with the push that Pensions are going to be making we are going to see more equities being listed we are going to see corporate bonds…”
MD and Petra co-founder, Kofi Fynn, also believes that with leapfrog’s capital injection and expertise, “Petra will be able to invest in expanding infrastructure to better serve existing clients and grow our market reach, while boosting Ghana’s pension industry.”
“Pension reform was introduced to ensure that the previously unserved would also have a chance to invest for their future, and that is exactly the service we have been called to provide. We see the pensions industry growing fast in Africa and are very excited about the growth of the micro pension sector,” he concluded.