2025 is shaping up as a year of selective redeployment, not passive cash build-up

1.     Given the backdrop of market volatility and shifting global wealth flows, what are the priority themes your team at Absa Wealth Mauritius is focusing on in 2025?

Markets in 2025 are being shaped by volatility, shifting wealth flows, and a more complex geopolitical backdrop. For investors, the task is to capture long-term opportunities without losing sight of resilience. At Absa Wealth Mauritius, our focus this year is on themes that reflect both.

Artificial Intelligence is at the forefront. Its impact now extends well beyond the technology sector, driving productivity gains in industries as diverse as healthcare, logistics, and financial services. Far from being a passing trend, AI is a structural force that we believe will shape equity markets for years to come.

U.S. equities, particularly the S&P 500 and Nasdaq, remain central to global portfolios. Despite valuations that sit above historical averages, American large-cap technology and growth companies continue to deliver strong earnings momentum, cementing the U.S. as the world’s innovation hub.

Emerging markets have staged an impressive rebound, delivering close to 50% year-to-date gains as a weaker U.S. dollar has provided a powerful tailwind. Dollar softness has eased external debt pressures and boosted capital flows into developing economies, while commodity-linked revenues have strengthened fiscal positions. China has been at the center of this resurgence, with renewed policy support and improving growth momentum helping to lift sentiment across the broader emerging-market complex. For investors, these markets offer diversification and access to higher growth dynamics at a time when global capital is seeking alternatives to developed-market concentration.

Gold continues to play its timeless role as a store of value. In a world where inflationary pressures linger, currencies fluctuate, and geopolitical risk persists, it provides stability that few other assets can match.

European defense has also become strategically important. Rising commitments from NATO members point to sustained, government-backed demand for years to come. The sector’s visibility and resilience make it a distinct anchor in portfolios at a time when security is increasingly tied to economic policy.

Finally, e-gaming has established itself as one of the fastest-growing parts of the digital economy. While it began in entertainment, the sector is expanding into education, training, and social connectivity, reflecting how new consumer behaviors and technologies converge to create entirely new growth markets.

We also see growing interest in alternative assets, particularly art. For high-net-worth clients, art has proven to be more than a passion, it is increasingly viewed as a store of cultural and financial value. At Absa Wealth Mauritius, we draw on our long heritage through the Absa Gallery and initiatives like the Art & Investment dialogue series to help clients explore art as part of a diversified portfolio. Beyond offering uncorrelated returns, art provides emotional resonance and a legacy dimension that many investors are seeking in 2025.

By combining structural growth drivers like AI and U.S. equities with tailwinds in emerging markets, defensive anchors such as gold and European defense, and new frontiers like e-gaming, we aim to build portfolios that are both resilient today and positioned for the opportunities of tomorrow.

2.     European equities have rallied in 2025. How are you thinking about Europe within a global, valuation-aware allocation?

Europe has delivered a strong start to 2025, supported by low starting valuations, targeted government spending, and sector-specific strength. Historically, periods of U.S. dollar weakness, such as 2000 to 2007, have coincided with European equities outperforming, and we see similar potential today, with currency dynamics likely to add to structural value.

Our focus remains on sectors with lasting support, such as defense and industrials, which benefit from public spending and carry relatively lower risk. Infrastructure-related companies are also attractive, as Europe continues to invest in energy transition and digitalisation projects.

For global portfolios, Europe offers diversification, value, and exposure to areas backed by policy and structural growth. Reflecting this, we are tactically overweight European equities, capturing upside from both fiscal tailwinds and potential currency-driven gains, while maintaining balance and resilience.

3.     Cash levels in private portfolios are still elevated after 2024’s volatility. Are clients redeploying, or is “dry powder” still the prevailing strategy?

Client portfolios continue to hold higher-than-average cash buffers, a natural response to 2024’s market volatility and ongoing uncertainty around U.S. government policy. At our level, many investors remain risk-off, favoring income-generating strategies over capital-at-risk products while waiting for clearer market signals.

That said, 2025 is shaping up as a year of selective redeployment rather than passive accumulation of dry powder. Conservative investors are directing cash into defensive themes such as gold and European defense assets that preserve capital while offering upside linked to government policy commitments. Meanwhile, those with a higher risk appetite are selectively investing in AI, e-gaming, and U.S. tech indices, viewing these sectors as long-term engines of growth despite higher short-term volatility.

Portfolios are taking a balanced approach, blending capital-preserving investments and coupon-generating strategies with high-conviction growth themes. Cash is actively positioned to support each client’s goals, ensuring flexibility and responsiveness as market opportunities emerge.

4.     Mauritius has long marketed itself as a gateway to Africa. With Dubai, Singapore, and London competing, what is Mauritius’ unique selling point in wealth management today?

Mauritius stands out as a truly unique gateway to Africa, not merely because of its geographic location, but due to the comprehensive advantages it offers to investors seeking exposure to the continent. Unlike other global financial centers, Mauritius combines a robust, internationally compliant regulatory framework with a stable political environment and a hybrid legal system that draws on the strengths of both civil and common law traditions. This combination provides a level of predictability and legal certainty that is highly valued by international investors.

What truly differentiates Mauritius is its investor-friendly ecosystem. The jurisdiction offers an attractive fiscal regime, including competitive tax rates, no capital gains tax, and an extensive network of double taxation avoidance agreements, making cross-border investment both efficient and secure. Its sophisticated financial services sector provides deep expertise in wealth structuring, private banking, and fund administration, supported by a highly skilled and bilingual workforce capable of navigating complex multi-jurisdictional requirements.

Transparency and compliance are central to Mauritius’ value proposition. The jurisdiction is recognized globally for its strict adherence to anti-money laundering standards and financial regulation, instilling confidence among international investors. Beyond technical and regulatory advantages, Mauritius offers a high quality of life, political stability, and a strategic time zone bridging Asia, Africa, and Europe, facilitating timely decision-making and engagement across continents.

It is important to note that Mauritius is not seeking to directly compete with financial hubs such as Dubai, Singapore, or London. Rather, it occupies a complementary position: a specialized gateway that combines African market access, regulatory credibility, and investor-focused structures. As the wealth management industry continues to grow globally, Mauritius is well positioned to benefit from this exponential expansion, offering international clients tailored solutions to participate in Africa’s long-term growth story.

In practice, Mauritius is not simply a conduit for capital into Africa; it is a trusted partner for investors seeking to create, protect, and grow wealth in a sustainable manner. Its combination of regulatory strength, investor-friendly policies, strategic positioning, and market insight allows international clients to access African growth opportunities with confidence and efficiency. For discerning investors focused on long-term value, Mauritius offers a platform that blends global standards with regional expertise, making it the jurisdiction of choice for wealth management and cross-border investment in Africa and beyond.

5.     The Africa Wealth Report 2025 highlights Mauritius’s +63% growth in HNWIs over the past decade — the strongest in Africa. What explains this outperformance, and can it be sustained?

Mauritius’s impressive 63% growth in high-net-worth individuals (HNWIs) over the past decade is a testament to the country’s strategic vision and its ability to position itself as a premier destination for wealth creation and preservation in Africa. Importantly, this growth has been achieved from a relatively low base, not from an already saturated peak, highlighting the island’s untapped potential and the opportunity for continued expansion. This outperformance is anchored in a combination of political stability, sound economic governance, and a deliberate effort to build a globally competitive financial services sector.

Unlike many jurisdictions in the region, Mauritius offers a unique blend of advantages. Its hybrid legal system, combining civil and common law traditions, provides legal certainty for complex transactions. The favorable tax regime, featuring no capital gains or inheritance tax, along with an extensive network of double taxation avoidance agreements (DTAAs), makes cross-border investment efficient and secure. These features have made Mauritius particularly attractive to global investors, family offices, and high-net-worth entrepreneurs seeking a stable and effective base for African and international operations.

Mauritius has also invested heavily in its financial infrastructure. The jurisdiction hosts a growing number of investment funds, private equity vehicles, and global business companies, many of which target Africa’s emerging markets. The government’s commitment to compliance and transparency, highlighted by its removal from the FATF grey list and EU blacklist, has further strengthened Mauritius’s credibility as a trusted financial center.

Beyond technical and regulatory advantages, the lifestyle appeal of Mauritius plays a role in attracting wealth. High quality of life, strong healthcare and education systems, and a secure environment make the island an appealing destination for HNWIs looking to relocate or establish a second base. This lifestyle dimension is further enhanced by Mauritius’s growing role as a cultural hub. Absa Wealth Mauritius has actively positioned art as an investment theme, connecting clients to both African and international markets. For HNWIs, this combination of wealth management, lifestyle, and cultural capital reinforces the island’s attractiveness as a base for building and preserving multi-generational legacies.

Looking ahead, sustaining this growth will require continued innovation. Mauritius must remain agile in responding to global regulatory shifts, expanding its digital finance capabilities, and developing new value-added services such as ESG investing, fintech solutions, and succession planning. Given that the market is still growing from a relatively low base, there is considerable room for further expansion, and Mauritius is well positioned to continue leading the continent in attracting and retaining wealth, reinforcing its role as Africa’s premier hub for high-net-worth individuals.

6.     Looking ahead, what is your outlook for sustainable and ESG-driven investing among investors over the next few years?

Sustainable and ESG-driven investing is no longer a niche trend, it is foundational to how capital will be allocated in the years ahead. Globally, ESG assets are projected to surpass $50 trillion by 2025, accounting for more than a third of total assets under management. This shift is being driven by a convergence of factors:

increasing regulatory requirements, rising investor awareness, and a growing body of evidence that ESG integration enhances long-term performance and resilience.

In Africa, the ESG conversation is gaining momentum. The continent faces some of the most pressing sustainability challenges, climate vulnerability, infrastructure deficits, and social inequality but also some of the greatest opportunities for impact. Investors are beginning to recognize that ESG is not just about ethics; it is about identifying risks and opportunities that traditional financial analysis often overlooks.

Mauritius is well-positioned to play a leadership role in this transition. The country is taking on-going actions to promote sustainable finance, including the development of a green finance framework and the introduction of ESG disclosure guidelines. Financial institutions, including Absa Mauritius, are increasingly incorporating ESG criteria into their investment processes. Interest is growing in green bonds, impact funds, and blended finance structures that align financial returns with measurable social and environmental outcomes. Absa Mauritius emphasizes the importance of balancing climate ambition with adaptation, ensuring that resources are directed to areas of greatest impact while mobilizing both public and private sector efforts effectively.

Over the next few years, ESG is expected to become a baseline expectation rather than a niche strategy. Investors, particularly younger generations and family offices, are demanding greater transparency, accountability, and purpose in how their capital is deployed. Asset managers will need to embed ESG into their core investment philosophy, improve data quality, and align with global standards such as the UN Sustainable Development Goals (SDGs) and the Task Force on Climate-related Financial Disclosures (TCFD).

ESG is now a structural shift in the investment landscape. For jurisdictions like Mauritius, which are agile, forward-looking, and committed to global best practices, this presents a significant opportunity to lead. Institutions such as Absa Mauritius are positioning themselves at the forefront of this transition, offering investors solutions that combine financial performance with measurable social and environmental impact.