Granite’s Hisham Akram on why pension funds could be Egypt's next big investment story

Granite Financial Holding is aiming to launch at least one or two pension funds before the end of the year, positioning itself among the first asset managers seeking to bring products to market under Egypt's updated framework for private pension funds. EnterpriseAM sat down with Granite Financial Holding founder and director Hisham Akram to discuss the company's plans for what could become some of Egypt's first pension funds under the new framework, the opportunity he sees in retirement investing, and why pension savings could eventually become a major source of long-term capital for the economy. Below are edited excerpts from our conversation:

EnterpriseAM: You've been talking about pension funds as a major opportunity for the industry. Is Granite working on anything in that space?

Akram: We're currently working on what is effectively a supplementary pension system. The closest comparison would be products such as 401(k)s in the US or individual retirement accounts in the UK. The idea is to give people a way to build retirement savings alongside the state pension system through professionally managed investment portfolios.

We're working with regulators, legal advisers, and potential corporate partners to put the right structure in place. The legislation is largely in place, but there are still implementation details that need to be clarified, particularly around tax treatment.

Our objective is to launch at least one or two pension funds before the end of the year. We believe these products could help fill an important gap in Egypt's retirement savings landscape while also creating a new source of long-term capital for the economy.

EnterpriseAM: How would these funds work, and how do they differ from the retirement options currently available in Egypt?

Akram: Egypt's retirement system has traditionally been built around the state pension scheme. The challenge is that the pension someone receives is ultimately constrained by the limits of that system. If a person earns a relatively high income during their career, the pension they receive after retirement may represent only a small fraction of what they earned during their working years.

The idea behind supplementary pension systems is to provide an additional layer of retirement savings. That's what you see in products such as 401(k)s in the US or individual retirement accounts in the UK. People save and invest throughout their careers while benefiting from a dedicated retirement framework.

Participants make regular contributions into an account that is invested on their behalf, and employers can also contribute depending on the structure. Unlike traditional defined-benefit systems, where retirement income is predetermined, these products operate on a defined-contribution basis. The outcome depends on how much someone contributes and how the portfolio performs over time.

The money is professionally managed, and the investment strategy evolves as participants get older. Someone in their twenties can generally take more investment risk than someone approaching retirement, so the portfolio should evolve accordingly.

EnterpriseAM: Private pension funds have existed in Egypt in one form or another for years. What's different now?

Akram: The framework has become much clearer and more structured than it was in the past. Private pension funds already existed, but the rules governing them were not always as clear as they needed to be.

The recent legislative amendments introduced stronger governance requirements and clearer oversight mechanisms. They also expanded the range of assets these funds can invest in, including equities, real estate funds, gold funds, and other investment vehicles.

Another important change is the increased emphasis on professional management. Larger funds are now expected to be managed by qualified professionals rather than operating under older structures that were often less institutionalized.

EnterpriseAM: Where does Granite stand today? How close are you to launching a product?

Akram: We're actively working with regulators, legal advisers, and potential corporate partners to build the right structure for these products. The legislation is largely in place, but there are still implementation details that need to be clarified before products can be launched at scale.

One of the biggest outstanding issues is tax treatment. Around the world, retirement systems rely heavily on tax incentives to encourage participation. If someone contributes part of their income into a retirement plan, they need certainty regarding how those contributions will be treated from a tax perspective.

That incentive is often what makes long-term retirement saving attractive. We are optimistic these issues will be resolved, and our objective is to launch at least one or two pension funds before the end of the year.

EnterpriseAM: Would these funds initially be offered directly to individuals, or through employers?

Akram: The most practical starting point is through employers. While the legislation allows broader structures, launching through companies is operationally simpler and easier to administer.

That effectively creates a B2B2C model. Contributions can be deducted directly through employers, administration becomes more efficient, and tax treatment can be handled more easily than in a purely direct-to-consumer structure.

Over time, the market may evolve beyond that. But for a country that is still developing its retirement savings ecosystem, starting through employers is likely to be the most logical path.

EnterpriseAM: To your knowledge, would these be among the first products launched under the new framework?

Akram: To the best of my knowledge, no new funds have yet been established under the updated framework. There are already hundreds of private pension funds operating in Egypt, but most were established under older arrangements and are currently going through a process of regulatory alignment.

What we're building is different not only because of the updated framework but also because of the participant experience. We want contributors to have much greater visibility into their retirement savings and investment performance than is typically available today.

EnterpriseAM: One thing you mentioned is transparency. What's missing from the current system?

Akram: People should be able to clearly understand where they stand at any given time. They should know how much they have contributed, whether their employer has contributed, how the portfolio has performed, and what benefits they have accumulated.

That level of transparency is standard in many developed pension systems. We believe it should become standard in Egypt as well. Participants should be able to monitor and understand their retirement savings rather than treating them as a black box.

EnterpriseAM: Beyond helping people save for retirement, what would these funds mean for Egypt's financial system?

Akram: Because pension funds don't just create retirement income — they create long-term capital. Every month, participants contribute money that needs to be invested somewhere, whether in government securities, equities, real estate funds, gold funds, or other investment vehicles.

Over time, pension funds become major institutional investors. They help deepen capital markets, improve liquidity, and create a more stable investment environment. One of the characteristics of more developed financial systems is the presence of large pools of long-term institutional capital, and pension funds play a major role in creating that capital.

They also help increase national savings rates. Every month new contributions enter the financial system, creating a steady flow of capital that can be deployed across the economy.

EnterpriseAM: You see pension funds as more than just another investment product. Why?

Akram: Because the impact extends well beyond the funds themselves. Building a pension industry creates demand for custodians, administrators, auditors, lawyers, technology providers, cybersecurity firms, call centers, and a wide range of supporting services.

It creates an entire ecosystem. If Egypt wants to continue developing its asset management industry and broader financial sector, retirement investing has the potential to become one of the most important growth areas over the next decade.

“Money market funds were one of the big stories of the past few years.” Pension funds could become one of the big stories of the next ten years.

EnterpriseAM: A lot of people approaching retirement today are more comfortable with bank certificates than digital investment platforms. How are you thinking about that challenge?

Akram: That's one of the challenges we're actively thinking about. Our platform was built as a digital-first experience, but many people approaching retirement today are not necessarily comfortable with fully digital onboarding and account management.

We've seen that firsthand. Some customers encounter challenges with face recognition, digital verification, or simply navigating a fully digital process. Others still prefer some level of human interaction before committing their savings.

We're exploring ways to bridge that gap. The objective is to preserve the efficiency of a digital platform while providing additional support for people who may need assistance during onboarding or account management.

EnterpriseAM: If someone comes to you at 60 and says they're about to retire but don't really have a plan, what's the first thing you tell them?

Akram: The most important objective is preserving purchasing power. Many retirees may spend twenty or thirty years in retirement, which means inflation becomes one of the biggest risks they face.

Retirement planning isn't simply about generating income. It's about making sure savings continue to retain their real value over time. That requires a careful balance between safety, liquidity, and growth.

Egypt also needs more retirement-income products. In many markets, retirees can convert accumulated savings into predictable income streams through products such as annuities. Those types of solutions are still underdeveloped in Egypt and represent an important opportunity going forward.

EnterpriseAM: Beyond pension funds, what else is on Granite's roadmap?

Akram: Our immediate focus is improving the experience around the money market account and expanding the services available to both individuals and corporate clients. We're working on additional payment capabilities and services that make the platform more useful in day-to-day financial activity.

At the same time, pensions remain one of our biggest priorities. Just as money market accounts helped create a new category in the market, we believe pension products have the potential to make a similarly significant impact over the years ahead.

We're also studying additional services, including payment cards. The broader objective is to continue building products that make investing and managing money easier, while helping people save and plan more effectively for the future.