Growth Investment Partners (GIP) — an SME financing platform established by British International Investment (BII), the UK’s development finance institution and a known backer of Ghanaian healthtech mPharma — has secured a $20m commitment from the Norwegian investment fund Norfund and local pension manager Axis Pension Trust.
The transaction highlights a rapidly accelerating trend in West African private markets: the structural mobilization of domestic retirement savings into private equity and venture capital. GIP’s capital raise directly follows the introduction of a government mandate pushing local institutional investors toward higher-risk, illiquid alternative assets to stimulate the real economy.
The 5% Pension Mandate
The timing of local pension funds entering the cap tables of platforms like GIP is not coincidental. Under the Ghana Venture Capital and Private Equity Compact introduced by the government, pension and insurance funds are expected to allocate at least 5% of their assets under management (AUM) to VC and PE by 2026.
Historically, Ghanaian pension portfolios have been heavily concentrated in government securities. While existing regulations theoretically permit schemes to allocate up to 25% of their capital to alternative assets, actual exposure has consistently hovered below 1%.
With Ghana’s total pension assets projected to surpass GHS 100bn (approximately $8.3bn) by the end of 2025, a fully realized 5% mandate represents roughly $330m in patient capital unlocked for local firms in high-growth sectors.
However, the directive creates a practical bottleneck. Most local pension schemes lack the in-house underwriting capacity to evaluate VC and PE managers, manage currency risk, or structure the governance required for private market investments. Furthermore, pension trustees remain inherently conservative, having recently navigated the turbulence of domestic debt restructuring and significant cedi volatility.
The Intermediary Boom
To bridge the gap between risk-averse institutional capital and capital-starved SMEs, a new wave of financial intermediaries is positioning itself to absorb the incoming liquidity.
Axis Pension Trust’s investment in GIP is part of a broader allocation strategy. The pension trustee recently participated in the GHS 383m ($35m) first close of the Ci Gaba Fund of Funds. Managed by Savannah Impact Advisory, Ci Gaba is West Africa’s first domestically domiciled private fund of funds, structured specifically to channel institutional capital into PE, VC, and private debt funds across Ghana, Nigeria, Senegal, and Côte d’Ivoire.
By backing intermediaries like GIP and Ci Gaba, pension funds outsource the manager selection and portfolio management risks.
“GIP has built a strong team to execute its investment strategy, and we are confident in their ability to deliver decent financial returns as well as real economic impact,” said Afriyie Oware, CEO of Axis Pension Trustees. “This partnership reflects our strategic focus on real sector investments that support productive local enterprises.”
The Local Currency Play
For GIP, the $20m injection scales a model specifically designed to fill the “missing middle” financing gap — the space between traditional, heavily collateralized bank lending and larger-ticket private equity.
A core component of GIP’s thesis is deploying flexible capital in local currency. By issuing longer-tenor funding in cedis, the platform shields scaling SMEs from the foreign exchange risk that has historically crippled African businesses reliant on dollar-denominated debt.
Since its launch in 2023, GIP has deployed over $40m across 16 portfolio companies. Its current assets include:
- Maagrace Garments Industries Limited (MGIL): A local garment manufacturing company.
- Truecoco: An agro-processing business targeting international export markets.
- eServices Africa Limited: A business process outsourcing (BPO) firm serving domestic and global clients.
According to GIP, its portfolio has supported 3,356 direct jobs to date, including the creation of 533 new positions. Jacob Kholi, Chief Executive and Investment Officer at GIP Ghana, noted that the fresh capital will be used to scale this model, combining local currency financing with operational governance support.
Naana Winful Fynn, Regional Director for West Africa at Norfund, added that GIP’s approach serves as an “effective model for addressing the SME gap” while delivering sustainable returns.
Looking Ahead
Accra’s structural experiment has established a clear pipeline: domestic institutional investors are being regulated into private markets, and specialist platforms are raising capital to catch the flow.
If vehicles like GIP and Ci Gaba can demonstrate that local pension money can be deployed into private markets with robust governance and acceptable commercial returns — despite macroeconomic headwinds — the Ghanaian model could serve as a blueprint for unlocking dormant institutional capital across the wider continent. The true test of the mandate will be the performance data of these early investments over the next three to five years.