Economy
Pension Fund Operators to Boost Private Equity Investment
By Adedapo Adesanya
Pension Fund Operators Association of Nigeria (PenOp) has partnered with the African Private Equity and Venture Capital Association (AVCA) to empower local investors and develop private equity (PE) as an asset class in Nigeria.
Private equity is an investment class that consists of capital that is not listed on a public exchange. It is made up of funds and investors that directly invest in private companies, or that engage in buyouts of public companies, resulting in the delisting of public equity.
Speaking about the partnership, the Chief Executive (CEO) of PenOp, Mr Oguche Agudah, said, “Pension funds realise that they need to diversify into alternative investments and private equity presents one of such opportunities.
“However, we haven’t seen that much uptake of this locally. In addition to other initiatives we are pursuing, we are hoping that this partnership with AVCA will help to further open up this space.”
He maintained that domestic capital plays a vital role in accelerating economic growth in Nigeria and across the continent in general.
He cited that over the last 10 years, the value of Nigerian pension funds has grown markedly to peak at over $25 billion in December 2020, of which a marginal 0.03 per cent has been allocated to private equity.
This partnership between PenOp and AVCA, Mr Oguche said, will focus on training and networking, including an introduction to Development Finance Institutions (DFIs), fund managers and other stakeholders within the global private equity ecosystem, to ensure the growth of private equity in Nigeria, especially for pension operators.
He submitted that as part of this collaboration, PenOp will also support AVCA’s research and advocacy by providing insight into pension fund investments in PE and their impact.
During the African Institutional Investor Roundtable hosted at AVCA’s annual conference in April, there was a discussion about ways to encourage pension funds on the continent to increase their allocations to private equity.
The roundtable event was a partnership between PenOp, AVCA, Southern African Venture Capital and Private Equity Association (SAVCA) and East Africa Venture Capital Association (EAVCA).
The event was attended by several Nigerian pension funds and international DFIs. It was enlightening and engaging, and the outcomes from the event will be reviewed by all associations involved, with a view to working on removing the identified roadblocks.
On his part, Mr Abi Mustapha-Maduakor, the CEO of AVCA, said: “Our mission at AVCA is to facilitate more private investment into Africa, and part of this work involves unlocking domestic capital by demystifying the asset class.
“We know that African institutional investors are increasingly looking at PE to diversify their portfolios, so this collaboration with PenOp will enable us to equip Nigerian pension funds with the tools and resources they need to achieve superior returns by investing in the continent’s growing businesses.”
The AVCA is the pan-African industry body that promotes and enables private investment in Africa. It plays a significant role as a champion and effective change agent for the industry, educating, equipping and connecting members and stakeholders with independent industry research, best practice training programs, and exceptional networking opportunities.
With a global and growing member base, AVCA members span private equity and venture capital firms, institutional investors, foundations and endowments, pension funds, international development finance institutions, professional service firms, academia, and other associations.
This diverse membership is united by a common purpose: to be part of the Africa growth story.
Pension Fund Operators Association of Nigeria (PenOp) is an independent, non-governmental, non-political and non-profit making body.
It was established to promote the operations of the pension industry, provide for self-regulation and ensure that international best practices relating to the industry are observed by the operators registered in Nigeria.
Its positioning is to be the influencer externally and the ‘mother to all’ internally.
Its role internally is to add value to its members across all levels; information, education, visibility, networking, strategy, product development, etc. Externally its role is to increase the awareness and visibility of the pension industry and enable external stakeholders to understand and participate in the development of this financial sub-sector wherever and whenever possible.
By Adedapo Adesanya
Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.
The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.
During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The last trading session of this week on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note, with a 0.66 per cent loss on Friday.
This was influenced by sustained selling pressure and cautious trading, which forced investors into profit-taking.
Data obtained by Business Post showed that the energy sector fell by 4.66 per cent, the insurance counter dipped by 2.23 per cent, the consumer goods index depreciated by 0.96 per cent, and the banking segment shed 0.28 per cent, while the industrial goods space remained unchanged.
At the close of business, the All-Share Index (ASI) of Nigeria’s stock exchange went down by 1,531.81 points to 232,049.02 points from 233,580.83 points, and the market capitalisation dropped N983 billion to settle at N148.905 trillion compared with Thursday’s N149.888 trillion.
Aradel was the worst-performing equity after it lost 10.00 per cent to close at N1,417.50. International Energy Insurance slipped by 9.95 per cent to N5.79, Trans-Nationwide Express depreciated by 9.89 per cent to N3.28, eTranzact crashed by 9.79 per cent to N14.75, and UPDC slumped by 9.72 per cent to N28.12.
The best-performing equity for the day was Universal Insurance, which gained 6.32 per cent to close at N1.01, McNichols grew by 5.52 per cent to N8.60, Linkage Assurance expanded by 4.67 per cent to N1.57, NGX Group appreciated by 4.35 per cent to N120.00, and Transcorp increased by 3.62 per cent to N41.50.
As look at the activity level indicated that investors traded 388.7 million stocks worth N18.4 billion in 44,631 deals compared with the 393.7 million stocks valued at N19.2 billion executed in 45,813 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 1.27 per cent, 4.17 per cent, and 2.58 per cent, respectively.
By Adedapo Adesanya
The Naira recorded a loss of 82 Kobo or 0.06 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 26, exchanging at N1,380.93/$1, in contrast to the previous day’s rate of N1,380.11/$1.
Equally, the domestic currency further weakened against the Pound Sterling in the official FX market yesterday by N6.06 to settle at N1,824.90/£1 versus the preceding session’s N1,818.84/£1, and lost N10.74 on the Euro to sell at N1,577 .58/€1 versus N1,566.84/€1.
At the GTBank forex counter, the Naira depreciated against the greenback during the session by N4 to close at N1,387/$1, in contrast to Thursday’s value of N1,383/$1, and at the parallel market, it was unchanged at N1,395/$1.
Interbank FX activity among financial institutions has fluctuated amid a sharp slowdown in forex market interventions by the Central Bank of Nigeria (CBN), as it allows demand and supply to move the market.
Also, a stronger greenback has generally put significant pressure on emerging-market currencies.
Nigeria has accessed the first tranche of a proposed $5 billion derivatives financing arrangement with First Abu Dhabi Bank PJSC, the largest lender in the United Arab Emirates (UAE).
The $5 billion facility, approved by the National Assembly earlier this year, is part of the federal government’s plan to diversify external financing sources and reduce borrowing costs. Structured as a Total Return Swap with First Abu Dhabi Bank, proceeds are earmarked for refinancing debt and supporting infrastructure financing.
If the proceeds are brought into the country through the official FX market, the transaction will increase the currency reserves or Dollar liquidity.
At the cryptocurrency market, Solana (SOL) grew by 2.2 per cent to $71.92, Cardano (ADA) gained 1.1 per cent to trade at $0.1474, Ripple (XRP) also appreciated by 1.1 per cent to $1.05, Dogecoin (DOGE) expanded by 0.9 per cent to $0.0755, and Ethereum (ETH) improved by 0.4 per cent to $1,578.84.
On the flip side, TRON (TRX) slid 0.6 per cent to $0.3203, Binance Coin (BNB) slumped by 0.3 per cent to $564.33, and Bitcoin fell by 0.2 per cent to $60,219.37, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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