Strengthening the Custody Chain: Bank One Supports Africa’s Private Capital Evolution

Adecade ago, fewer than one in ten African pension funds reported exposure to private capital. In 2024, Preqin’s Institutional Allocation Study shows that more than one-third expect to increase allocations to private debt and infrastructure over the next three years. Appetite is growing, but the means of entry remain uneven. Complex fund structures span jurisdictions, and settlement windows rarely align with the tight capital-call schedules imposed by alternative asset managers.

In April this year, a Mauritian pension fund faced that reality. A modest investment into a pan-African renewable energy fund required subscription before a Friday deadline. The fund’s depositary was in Luxembourg, the general partner in Nairobi, and investors were spread across three time zones. The difference between participation and exclusion came down to a custodian capable of moving cash, verifying documentation, and reconciling records across multiple regulatory domains in a matter of hours—not days.

That is the service gap Bank One set out to close. From our base in Mauritius, we provide asset safekeeping, trade settlement, income collection, corporate-action processing, and regulatory reporting for a diversified client base. Real-time integration with Bloomberg ensures full trade-cycle visibility, while secure file-transfer protocols maintain data integrity. Yet our greatest strength is not technology—it is continuity. With low staff turnover, our clients deal with the same specialists year after year, an increasingly rare consistency in a consolidating industry.

A Platform Without Conflicts

Independence is the second pillar of our offering. Bank One does not manufacture investment products or channel clients toward proprietary platforms. We operate on an open-architecture basis, working with third-party managers selected on merit. Whether the portfolio includes listed equities, sovereign bonds, ETFs, or illiquid private equity funds, clients benefit from reporting designed for decision-making—concise, timely, and stripped of promotional gloss.

To broaden choice without compromising rigour, we partnered with Euroclear, one of the world’s most trusted post-trade market infrastructure providers. Euroclear’s global settlement and fund-servicing network extends our custody reach well beyond domestic markets while keeping client assets off our balance sheet—a structure that materially reduces counterparty risk.

Returning to the April example: the Mauritian pension fund submitted its subscription through Euroclear’s platform. By mid-afternoon, confirmation of receipt had been issued, and the allocation secured. No manual reconciliations. No cross-border lag. Just clear visibility and on-time execution.

Momentum Behind Private Markets

The appeal of private capital is structural. Sovereign bonds no longer offer the income they once did, equity valuations remain elevated in many markets, and long-dated investments linked to energy transition and digital infrastructure demand capital that public markets cannot adequately supply.

Preqin forecasts global private capital assets under management will reach $18.3tn by 2027, with private debt and infrastructure absorbing much of that growth. Africa is increasingly a part of this narrative. According to the African Private Equity and Venture Capital Association (AVCA), the continent recorded $6.5bn in private capital deal value in 2023—its second-highest total ever. Early data from 2024 point to an even greater focus on climate-linked strategies and digital connectivity.

Yet these headline numbers conceal structural barriers. Investors across Sub-Saharan Africa and the Indian Ocean face fragmented regulatory frameworks, foreign-exchange restrictions, and a shortage of custodians that can accommodate both listed and unlisted assets under one roof. That is why we have embedded private-market services—capital call processing, distribution reconciliation, bespoke reporting—directly within our custody platform. Clients can now monitor all holdings holistically, avoiding the operational sprawl that typically accompanies alternative assets.

Mauritius: A Strategic Jurisdiction

Mauritius strengthens this proposition. Its hybrid legal framework—rooted in English common law but adapted for international finance—is backed by robust regulatory oversight. Its time zone enables smooth trading across Africa, Europe, and Asia. Our affiliation with East Africa’s I&M Group provides deeper insights into multi-currency flows, tax structures, and cross-border transaction logistics.

Our clients include sovereign entities, pension funds, family offices, and investment intermediaries. Some are African institutions diversifying outward; others are global allocators seeking exposure to African growth. All benefit from a custodian that understands local nuance while maintaining global standards.

Execution Over Innovation

The success of that April transaction rested not on groundbreaking technology but on operational clarity. Roles had been rehearsed, processes agreed, and escalation routes defined. This procedural discipline is fundamental. Internally, we track service-level performance and share metrics with clients. Any deviation from standards prompts root-cause analysis—not a cosmetic fix.

In the custody business, predictability trumps novelty. Clients rely on us to deliver consistent execution, not constant reinvention. Our roadmap is therefore guided by practical needs:

• First, automating onboarding and KYC procedures so new limited partners in private funds can clear compliance in hours, not weeks.
• Second, expanding our analytics dashboard to include ESG metrics requested by global allocators.
• Third, deepening ties with regional securities depositories to accelerate cross-listed settlements.

Success will not be measured by product launches, but by how reliably we protect assets, deliver clarity, and enable capital to flow where it is needed most.

Looking Ahead

The future of custody lies in convergence. As digital asset classes gain regulatory recognition, we intend to offer secure custody solutions that bridge traditional and tokenised securities. When that day comes, whether a pension fund facing a subscription deadline or an investor allocating to Africa’s climate future, they should find a custody path that is not only open—but fully operational and well lit.

By Khalid Mahamodally Head of Securities Services and Deputy Head, Private Banking, Bank One