Squire Patton Boggs (US) LLP (SPB) announced today that it has been retained to counsel Transat Management Company, LLP (TMC), a US-domiciled investment management firm focused on African institutional investors, in establishing a “regulatory sandbox” to facilitate African institutional investment into US capital markets in order to catalyze reciprocal capital flows into Africa.
Africa faces an annual development financing gap exceeding US$400 billion, driven by declining development assistance, tightening global liquidity, and shifting trade dynamics. The strategic challenge is building the financial infrastructure required to attract and scale global institutional investors to meet Africa’s development needs.
Recognizing this, the African Development Bank (AfDB) recently launched the New African Financial Architecture for Development (NAFAD) to help overcome structural obstacles to mobilizing resources on a large-scale. Convened under the patronage of H.E. President Alassane Ouattara of Cote d’Ivoire and the President of the AfDB, Dr Sidi Ould Tah, the NAFAD Consultative Dialogue noted, “[t]his gap does not primarily reflect a lack of capital – Africa holds approximately $4 trillion in domestic long-term savings – but rather deep structural constraints: institutional fragmentation, inefficient risk allocation, limited balance-sheet leverage, and insufficient coordination between public and private capital.”
To help bridge this development financing gap, SPB and TMC will engage with US and African regulators, assemble TMC’s African Limited Partner Advisory Council (LPAC) — targeting anchor commitments from sovereign wealth funds, pension funds, and insurance allocators — and structure initial co-investments in energy and strategic resources, digital infrastructure, logistics, and healthcare. This approach centers on creating an operational framework designed to align the requirements of international institutional investors with local regulatory constraints, while simultaneously structuring scalable investment pipelines.
Even a 1% reallocation of global institutional assets toward Africa would generate nearly $3.8 trillion — enough to close Africa’s entire infrastructure financing gap. The TMC model is based on the successful example of Singapore’s sovereign investment institutions which catalyzed approximately $326 billion in additional US FDI into Singapore after 2010. SPB will provide US regulatory and sovereign advisory counsel to TMC so it can replicate that push-to-pull dynamic for Africa.
