Business

Lumka Mlambo, SA SME Fund

South Africa may have the largest pension fund industry on the continent, with over R6tn in assets under management, but the local venture capital (VC) sector has long battled to get a slice of these funds to invest in the country’s fast-growing tech startups.

On top of this, changes to Regulation 28 of the Pension Fund Act, which took effect in January 2023, allowing pension funds to allocate up to 15% of their funds under management to private equity and VC, have made little difference. Now, more than three years on, the share of pension fund assets invested in VC remains negligible. While no official figures exist, some local VCs like Knife Capital and Fireball Capital put it at no more than 0.2%.