Tuesday, December14, 2021 / 06:14 PM / by AVCA / Header Image Credit: AVCA

The release of thisflagship report aims to bridge the gap between these two complimentaryindustries by investigating and assessing the role of Nigerian pension funds inempowering local investors in Nigeria's private equity industry.

The African Private Equity and Venture CapitalAssociation (AVCA) and the Pension Fund Operators Association of Nigeria(PenOp) are pleased to release the first-ever report on Nigerian Pension fundsengagement with private equity. The report incorporates responses fromNigeria's leading pension fund managers, exploring their interest andperception of private equity as an asset class.

Nigeria's pension fund industry has grown at animpressive CAGR of 18% over the last five years, culminating in an asset baseof N12.3 trillion (US$29.9billion) as at December 31st, 2020. Although there has been a concerted effortby both sets of industries to increase the level of pension allocation toprivate equity, the allocation of Nigeria's pension funds to the asset classhas traditionally been low when compared to their allowable limits. The releaseof this flagship report aims to bridge the gap between these two complimentaryindustries by investigating and assessing the role of Nigerian pension funds inempowering local investors in Nigeria's private equity industry. 

The Pension Funds and Private Equity in Nigeria Reportfinds that Nigerian pension funds display a strong appetite for private equityinvestment both locally and across the continent. 75% of the pension fundmanagers that participated in the survey plan to accelerate or maintain theircurrent pace of capital commitments to African PE in the next five years,citing a desire for portfolio Diversification and Performance as the mostimportant factors driving their investment plans.

The report also catalogues some of the obstacles facedby pension funds investing in the asset class. Respondents highlighted aperceived weak exit climate and a limited number of established African GPs assignificant challenges for pension funds investing in African private equity.However, 49% of survey participants did not consider any of the current pensioninvestment regulations to be prohibitive, suggesting that respondents view theexisting regulatory environment as conducive for investment in alternativeasset classes.

Speaking on the publication, the CEO of AVCA, AbiMustapha- Maduakor, said "Increasing interest in Africa's private equityindustry from domestic and international investors alike underscores the needto analyse the perceptions and concerns of institutional investors to promotean open dialogue on the continent's unique business environment. This jointpublication exemplifies AVCA's commitment to championing private investment inAfrica: bridging the knowledge gap between industry stakeholders byproviding topical, informative research on the opportunities private equity hasto offer Nigerian pension funds".

Oguche Agudah, the CEO of PenOp said "Local pensionfunds have expressed a desire to increase their allocation to private equityand more impactful investments. However, there are a number of bottlenecks thatrestrict them. The partnership with AVCA helps us to work with industrystakeholders to identify and address these bottlenecks for our mutual benefit,and the benefit of the local economy".

Download Full PDF Report Here

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