Key Takeaways
- • RisCura has launched the RisCura Africa RealView Index (RARI), a pioneering benchmark designed to measure African equity market performance while excluding South Africa, addressing a critical gap in transparent and representative market data for African investors.
- • Global benchmark indices have historically disengaged from African market movements during volatility periods, creating a "blind spot" that obscures true African equity performance and constrains investment decision-making for asset managers and institutional investors.
- • The choice of benchmark materially reshapes performance attribution, as demonstrated by cases where Africa ex-SA equity funds and their global benchmarks delivered strong absolute returns but with "very different contributors," indicating significant divergence in how performance is measured and evaluated.
- • Accurate African equity benchmarks are increasingly critical as investor interest in the continent grows, enabling better investment analysis, performance evaluation, asset allocation decisions, and transparency for the estimated $200+ billion in assets under advice in the African market space.
- • South African private equity continues to outperform listed equity markets, with over 70% of limited partners surveyed expecting African private equity returns to outperform emerging market private equity returns over the next decade.
Summary
RisCura, a global financial services firm advising on more than $200 billion in assets, has introduced the RisCura Africa RealView Index (RARI) to address fundamental benchmarking deficiencies in African equity markets. The new index provides a transparent, reliable measure of African equity performance excluding South Africa, filling a critical void that has long constrained institutional investor participation and performance evaluation in the continent's capital markets.
The development responds to a documented structural problem: global benchmark indices, such as the S&P 500 and other widely used standards, are constructed in ways that cause them to disengage from African market dynamics during periods of volatility and rebound. This "global benchmark blind spot," as identified by RisCura's research, has obscured true African equity performance and created significant distortions in how investors measure returns and allocate capital. The Nigeria rebound serves as a case study—global benchmarks failed to capture the market's strength, leaving investors reliant on flawed performance metrics.
Performance attribution analysis reveals the material impact of benchmark selection. Multiple African equity funds achieved strong absolute returns, yet when compared against different benchmarks, the contributors to those returns diverged significantly. This divergence underscores that benchmark choice is not merely a technical matter; it fundamentally reshapes how investment performance is interpreted, evaluated, and reported to stakeholders. For asset managers and institutional investors, the availability of accurate, Africa-focused benchmarks is essential for informed decision-making and transparent reporting.
The launch of RARI is anticipated to accelerate market maturity and investor confidence in African equities. As investor interest in African markets continues to grow, robust benchmarking tools become increasingly critical for facilitating investment analysis and asset allocation across the continent. Concurrently, South African private equity markets have continued to outperform listed equities, with over 70% of limited partners surveyed expecting African private equity returns to outperform broader emerging market private equity returns over the next decade—a dynamic that reinforces the importance of comprehensive benchmarking across both public and alternative African investment vehicles.
The development responds to a documented structural problem: global benchmark indices, such as the S&P 500 and other widely used standards, are constructed in ways that cause them to disengage from African market dynamics during periods of volatility and rebound. This "global benchmark blind spot," as identified by RisCura's research, has obscured true African equity performance and created significant distortions in how investors measure returns and allocate capital. The Nigeria rebound serves as a case study—global benchmarks failed to capture the market's strength, leaving investors reliant on flawed performance metrics.
Performance attribution analysis reveals the material impact of benchmark selection. Multiple African equity funds achieved strong absolute returns, yet when compared against different benchmarks, the contributors to those returns diverged significantly. This divergence underscores that benchmark choice is not merely a technical matter; it fundamentally reshapes how investment performance is interpreted, evaluated, and reported to stakeholders. For asset managers and institutional investors, the availability of accurate, Africa-focused benchmarks is essential for informed decision-making and transparent reporting.
The launch of RARI is anticipated to accelerate market maturity and investor confidence in African equities. As investor interest in African markets continues to grow, robust benchmarking tools become increasingly critical for facilitating investment analysis and asset allocation across the continent. Concurrently, South African private equity markets have continued to outperform listed equities, with over 70% of limited partners surveyed expecting African private equity returns to outperform broader emerging market private equity returns over the next decade—a dynamic that reinforces the importance of comprehensive benchmarking across both public and alternative African investment vehicles.
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