Rwanda sovereign fund plans hiring spree to invest overseas
Agaciro, Rwanda’s sovereign wealth fund, is looking to hire between 6 and 12 new staff across investment management, legal, finance and operations as it prepares to increase its foreign investments and diversify its holdings.
Since October 2022, the fund has cut its headcount from 24 to 13. The planned new staff will be responsible for implementing a significant shift in Agaciro’s investment strategy, details of which will be announced in September.
“The ideal applicants will have multi-sector and multi-asset experience,” said Gilbert Nyatanyi, CEO of Agaciro, adding that experience in real estate, private equity and other private markets would be particularly welcomed.
Formed in 2012, the fund initially relied on voluntary contributions from public and private organisations and individuals. It halted voluntary contributions in April 2020, at which point average monthly donations were running at around $300,000.
Most of Agaciro’s planned new hires will be in the investment department, the fund's core department, where it is looking for those with international exposure, sophisticated investment experience, analysis and related skills.
In terms of legal staff, Agaciro is looking for professionals with experience structuring private investment deals – those with international finance and accounting experience, and operations professionals who would be able to handle the fund’s multiple shareholdings.
The fund has a total AUM of 299 billion Rwandan francs ($254 million), 71% of which is comprised by equity stakes in 29 companies. Of those companies, 23 are formerly state-owned enterprises in a range of sectors, from information and communication technology to agriculture to financial services. A quarter of the fund’s AUM is in fixed income, notably term deposits at Rwandan banks, Rwandan government bonds and corporate bonds.
FOREIGN EXPANSION
Agaciro is currently conducting a deep-dive review of its portfolio to explore which holdings it will retain, divest from, merge, or increase investment to. The divestment process will form part of the new strategy to be announced in September.
Proceeds of the sales will be used to invest in a more diverse portfolio across Rwanda, elsewhere in Africa and – eventually – globally, including Asia, according to Nyatanyi.
So far, the review process has concluded that the fund will in future operate as an “independent business-oriented sovereign wealth fund”, added Nyatanyi, noting that Agaciro's team had recently visited the sovereign funds in Belgium Ireland and Morocco to learn about their approaches and to discuss the possibility of future investment partnerships.
Investing beyond Rwanda will create diversification, improve returns, allow the fund to pursue its ESG strategy and bring in more long-term investment opportunities, Nyatanyi said. The fund is preparing to actively pursue partnerships with a range of institutional investors from abroad, including those in Asia.
“We are looking for partners, be they sovereign wealth funds, pension funds, insurance companies, corporates or investment managers,” Nyatanyi said.
But early projects will likely be with peer SWFs within Africa. “This is naturally our ecosystem,” he said, pointing to counterparts in Morocco, Gabon, Ethiopia, Djibouti, and Botswana as examples as the type of funds Agaciro would partner with.
Initially, ticket sizes will be below $10 million. Agaciro currently only has one holding beyond Rwanda, an $8 million investment in the Eastern and Southern African Trade and Development Bank. The TDB is an African development finance institution, with total assets of $8.4 billion. The fund anticipates a 10% return from the first year of the investment in about two months.
CREATING IMPACT
Nyatanyi pointed to potential investments in similar development institutions, including the African Export-Import Bank, known as Afreximbank, headquartered in Egypt, and the Nigeria-based Africa Finance Corporation (AFC). A year from now the fund is likely to have completed investments in one of the two, in addition to perhaps another investment in TDB, he added.
“Diversifying means not focussing only on Rwanda. It allows us to diversify in currency and geography,” he said. “We are seeking a return at the same time as creating an impact – progress on gender, the environment and socioeconomic [equity] is important to us.”
Another benefit of focusing on diversification is that it will allow the fund to expand its expertise in new markets and asset classes, complementing the skills accrued from the current hiring initiative.
“We are 10 years young so we still have some expertise to acquire through co-investment,” said Nyatanyi.
He emphasised the long-term investment horizon of the fund. “We don’t have an exit strategy of five to seven years; we are patient investors,” he said.