Pension funds earn 20% from infrastructure investments – Uduanu
Managing Director and CEO of Sigma Pensions, Mr. Dave Uduanu, said pension fund trustees’ investments in infrastructure had returned up to 20%.
Although the exposure of PFAs to infrastructure is low, he said the ripple effect of investing in critical infrastructure that Nigeria needs is also a payoff for PFAs.
In a statement, he said so in Lagos at the Private Equity and Venture Capital Association of Nigeria conference, where stakeholders converged to discuss “The way forward, private capital for national development.”
Uduanu said, “If you look at the broad alternative asset class, what has worked well has been infrastructure funds. Infrastructure debt as a sub-asset class is about one percent of the industry and within that 10 percent, build and that fund has done well.
“One of the infrastructure debt funds, although at the start, is tracking 20% returns and it is naira-based.”
Besides providing competitive returns, he said, another gain for his business was being able to reduce the infrastructure deficit in Nigeria.
He added: “We are currently invested in two infrastructure funds and they are doing very well. Infrastructure funds are doing better than private equity funds and we would start to see more interest in this area. We would allocate more money to infrastructure because as we know the country needs a lot of infrastructure and pension funds are getting competitive returns from those infrastructure funds.
Speaking on the sidelines on PFAs investing through equity, he said the space was an emerging space with huge prospects for PFAs and institutional investors.
He said: “The private equity market is a space where companies raise funds outside of the listed market and where investors like pension funds invest through fund managers. Regulations do not allow us to invest directly in unlisted securities, so private equity is the only way to access unlisted securities, growth companies, infrastructure and real estate.