By Chinwendu Obienyi
The Managing Director and Chief Executive Officer, Sigma Pensions, Dave Uduanu, has revealed that Pension Fund Administrator (PFA) investments in infrastructure are currently yielding as high as 20 per cent.
Uduanu revealed this recently in Lagos at the Private Equity and Venture Capital Association of Nigeria (PEVCA) conference where stakeholders converged to discuss ‘The Road Ahead, Private Capital for National Development.
While noting that exposures to PFAs to infrastructure, Uduanu stressed that the ripple impact of investing in the critical infrastructure needed by Nigeria is also a gain for the PFAs.
“If you look at the alternative broad asset class, what has done well is infrastructure funds. Infrastructure debt as a sub-asset class is about 1 per cent of the industry and within that 10 percent construct and this fund has done well. One of the infrastructure debt funds although in the early days is tracking at 20 per cent of returns and it is naira based.”
Furthermore, he added that asides it providing competitive returns, another gain for his firm is being able to reduce the infrastructure deficit in Nigeria.
He added: “We are currently invested in two infrastructure funds and they are and they are doing very well. Infrastructure funds are doing better than private equity funds and we would begin to see more interest in that area. We would allocate more money to infrastructure because as we know the country needs a lot of infrastructure and the pension funds are getting competitive returns from these infrastructure funds.”
Furthermore, speaking on the sidelines on PFAs investing through private equities (PE), he expressed that the space is an emerging space with enormous prospects for PFAs and institutional investors.
He said: “The private equity market is a space where companies raise money outside the listed market and investors like pension funds invest through fund managers. The regulation doesn’t allow us to invest directly in unlisted securities, so private equity is the only way to access unlisted securities, growing companies, infrastructure, and real estate.”