By Favour Nnabugwu
Pension Fund Operators Association of Nigeria (PenOp) in partnership with African Private Equity and Venture Capital Association (AVCA) set plan in motion to release report on Nigerian Pension funds engagement with private equity.
The release of this flagship report aims to bridge the gap between these two complimentary industries by investigating and assessing the role of Nigerian pension funds in empowering local investors in Nigeria’s private equity industry.
The Pension Funds and Private Equity in Nigeria Report finds that Nigerian pension funds display a strong appetite for private equity investment both locally and across the continent. 75% of the pension fund managers that participated in the survey plan to accelerate or maintain their current pace of capital commitments to African PE in the next five years, citing a desire for portfolio Diversification and Performance as the most important factors driving their investment plans.
The report also catalogues some of the obstacles faced by pension funds investing in the asset class. Respondents highlighted a perceived weak exit climate and a limited number of established African GPs as significant challenges for pension funds investing in African private equity. However, 49% of survey participants did not consider any of the current pension investment regulations to be prohibitive, suggesting that respondents view the existing regulatory environment as conducive for investment in alternative asset classes.
The partnership with AVCA helps us to work with industry stakeholders to identify and address these bottlenecks for our mutual benefit
Speaking on the publication, the CEO of PenOp, Mr OgucheAgudah, said “Local pension funds have expressed a desire to increase their allocation to private equity and more impactful investments.
However, there are a number of bottlenecks that restrict them. The partnership with AVCA helps us to work with industry stakeholders to identify and address these bottlenecks for our mutual benefit, and the benefit of the local economy
The CEO of AVCA, Abi Mustapha- Maduakor, said “Increasing interest in Africa’s private equity industry from domestic and international investors alike underscores the need to analyse the perceptions and concerns of institutional investors to promote an open dialogue on the continent’s unique business environment. This joint publication exemplifies AVCA’s commitment to championing private investment in Africa: bridging the knowledge gap between industry stakeholders by providing topical, informative research on the opportunities private equity has to offer Nigerian pension funds.”