Pension Fund Operators Association of Nigeria (PenOp) has partnered the African Private Equity and Venture Capital Association (AVCA) to empower local investors and develop private equity (PE) as an asset class in Nigeria.
Speaking about the partnership, PenOp Chief Executive, Mr. Oguche Agudah to Inspenonline 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. Over the past 5-10 years, the value of Nigerian pension funds has grown markedly to peak at over US$25bn in December 2020, of which 0.03% has been allocated to private equity.
This partnership between PenOp and AVCA, 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.
Abi Mustapha-Maduakor – CEO of the African Private Equity and Venture Capital Association (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 African Private Equity and Venture Capital Association is the pan-African industry body which promotes and enables private investment in Africa.