Global expertise, local impact

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Khoabane Phoofolo, Head of BlackRock Africa, discusses how through the local office, the team is bringing the breadth of BlackRock to investors across the continent. Khoabane Phoofolo joined BlackRock almost 20 years ago. He has worked across 2 continents and multiple investment divisions: from its retail iShares proposition to US pensions and endowments. He then took the opportunity to join the Cape Town office and lead BlackRock’s Africa business to partner with investors across the continent, using its global reach, BlackRock seeks to offer investment solutions and strategies tailored to the needs of local investors.

Q: How is BlackRock supporting investors across Africa?

BlackRock has been supporting investors in Africa for more than 25 years¹. We now work with clients in 15 countries across the continent, helping millions invest to build savings that support them throughout their lives. We pair BlackRock’s global asset management expertise along with our intimate understanding of the local African markets help more and more clients achieve their goals.

This isn’t just about our financial capabilities though – it is also about how we can collaborate with our clients to provide knowledge transfer and expertise. For example, we partner with the Association of Black Securities and Investments Professionals (ABSIP), to give Emerging Managers in South Africa the opportunity to attend the BlackRock Educational Academy to convene with peers across the globe.¹ This reflects our purpose as a business: helping our clients, inspiring our employees and supporting our local communities.

Q: What structural trends in the current market are affecting investors?

We expect continued economic uncertainty in 2025, shaped by persistent inflation, geopolitical fragmentation, and a higher-for-longer interest rate environment. Central to this shift is the influence of global mega forces, such as digital disruption and artificial intelligence and the low-carbon transition.

Over the past decade, there has been growing interest in sustainable investing, particularly the low-carbon transition. According to the BlackRock Investment Institute Transition Scenario, annual investment in the global energy system could rise from about US$2 trillion today to US$4.5 trillion by the 2040s². This scale of capital reallocation can have implications for portfolio positioning.

More recently, digital disruption has taken center stage, with AI driving unprecedented demand for infrastructure. Data center capacity is projected to expand by more than 150 GW by 2030, with total capex projected to exceed US$1.5 trillion³. For investors, this signals both the scale of opportunity and the structural shifts reshaping markets.
These mega forces are not short-lived trends—they are durable drivers of change that require a long-term framework for portfolio planning.

Risk. Forecasts/Estimates may not come to pass.

Q: What do these trends mean for portfolio construction and asset allocation?

In this macro environment, investors may need to rethink traditional strategic asset allocations and adopt more tactical, forward-looking approaches. This could mean a greater role for active management, systematic strategies, and private market exposures that can respond to market dispersion and volatility.

More broadly, offshore allocation considerations are playing a larger role in portfolio construction. Regulation 28 of the Pension Funds Act now allows up to 45% offshore exposure, prompting investors to take a more holistic view of their portfolios. As the offshore allocation limits have expanded, investors have begun looking at other asset classes e.g. Alternatives. We have witnessed shifts from global equity allocations to more Multi-Asset approaches. Technology is also becoming increasingly important in helping investors integrate global exposures with local assets.

Q: Market dynamics have shifted towards private markets, What role can alternative investments play in offshore portfolios and how is this asset class evolving?

Our private markets outlook 2025, highlighted that private markets have delivered better returns over the past decade than publicly listed markets, moving private markets into sharper focus as investors look beyond enhanced outcomes. They offer access to differentiated sources of return and diversification, but investors need to balance the opportunity with the risks, particularly the reduced liquidity compared to listed markets.

Diversification and asset allocation may not fully protect you from market risk.

Investors are increasingly using a range of alternative investments, including infrastructure, private credit, private equity and liquid alternatives, such as hedge funds. These can add different risk-return benefits as part of a dynamically managed diverse portfolio. Private debt, for example, may offer reliable yields for pension schemes. Some hedge fund investments can minimize volatility in highly unpredictable markets, offering ballast in a portfolio. As the market for alternative investments expands, we’re seeing a growing secondary market emerging.
Risk management cannot fully eliminate the risk of investment loss.

Q: What should first-time allocators to alternative investments consider before getting started?

Product innovation and new structures are making alternatives more accessible to first-time professional investors. For those seeking simplicity and resilience a multi-alternatives approach may be appropriate. Multi-Alternative investing blends private credit, infrastructure, hedge funds, and private equity within a Multi-Asset Portfolio. By diversifying across assets that behave differently in changing market environments, they may reduce overall portfolio risk. By investing in both public and private markets a multi-alternatives approach also expands the investible universe, helping to build more resilient portfolios with broader and more dynamic investment opportunities.

Q: How are technology and digital innovation shaping the investment landscape?

As investors across South Africa increase their offshore investments, technology is becoming crucial for constructing and managing Multi-Asset portfolios that incorporate global and domestic holdings. Technology can help analyse risk factors across these different areas.
There is also the use of digital innovation in investment processes like machine-based learning. Our Systematic Active Equities team has been using these technologies for decades to analyse various factors – be it growth versus value or small cap versus large cap exposure – and using the findings to help drive enhanced returns. Now we have the opportunity to expand on this with AI.

Q: How has Aladdin’s role evolved from supporting public markets to helping investors manage whole portfolios, including private market exposures?

Aladdin’s role has evolved from supporting public markets to providing a truly integrated end-to-end Whole Portfolio solution, launched in 2019 just as institutions began shifting significant capital into private markets. Today, it enables investors to manage exposures across all asset classes, including both direct and indirect private market holdings, with a consistent view of positions, performance and risk. By combining proprietary risk models, integrated cashflows, and advanced analytics, Aladdin helps empower clients to monitor, analyze, and act across their entire portfolio, supporting both day-to-day oversight and strategic decision-making.

Risk. While proprietary technology platforms may help manage risk, risk cannot be eliminated.

Q: Looking ahead, what opportunities do you see for investors in Africa?

Global investment markets are opening up to investors across Africa. There is now far greater access to a wide range of investment solutions, and partnering with institutions like BlackRock could help deliver the outcomes investors are looking for. At BlackRock, we aim to be a trusted partner for leading financial institutions In South Africa. Being one of the world’s largest asset managers means we can offer technology, expertise and access to the full range of asset classes, from cash to alternatives. As head of BlackRock Africa, I’m excited about the potential of this region and the role we can play in bringing global expertise to the local South African market, helping clients meet their long-term investment goals.

Khoabane Phoofolo

Head of BlackRock Africa

Risk warnings

¹Source: BlackRock, as of 1 October 2025
²Source: https://www.blackrock.com/za/professionals/literature/whitepaper/the-new-infrastructure-blueprint-stamped.pdf BlackRock Investment Institute, New Infrastructure Blueprint June, 2025)
³Source: McKinsey Data Center Demand Models, RBC BlackRock Investment Institute, BNEF, Grid Strategies, Goldman Sachs Research. Note: There can be no assurances that any forecasts or estimates will materialize BlackRock Private Markets Outlook, 1 January, 2025.

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