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.
