All Posts in "PenOps"

PenOps, AVCA partner to release maiden report on pension with private equity

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.”

Patoma Admin by — December 18, 2021 in Pension 0
PenOps, insurers to provide health insurance, lost of job policies, others

By Favour Nnabugwu

Arrangements are in top gear on the parlety between Pension Fund Operators Association of Nigeria (PenOp) and insurers to rovide health insurance, term life assurance, loss of job policy amongst others as incentives for their micro pension contributors.

One of the incentives, which is term life assurance and also known as pure life assurance, is a type of life insurance that guarantees payment of a stated death benefit if the covered person dies during a specified term. Once the term expires, the policyholder can either renew it for another term, convert the policy to permanent coverage, or allow the term life assurance policy to terminate.

Managing Director/CEO Access Pension Fund Custodian and Head, Media Committee of PenOp, Mrs. Idu Okwuosa, told insurance & Pension Journalists in Lagos that said the association is working assiduously to embed robust incentives into the micro pension plan.

Okwuosa stated, “PenOp and the National Pension Commission (PenCom) desire a better lifestyle for micro pension contributors and are working to see that aside the benefits of retirement and contingency savings, contributors maximise other robust incentives.

Head, Micro Pension Department, National Pension Commission (PenCom) Dauda Ahmed, at the event reiterated the benefits of micro pension plan, stating that it will improve the standard of living of the elderly as it provides a regular stream of benefits at old age.

He also said it will provide access to other incentives; secures financial autonomy and independence of retirees and that contributions will be passed to the next of kin in case of contributor’s death.

Patoma Admin by — December 10, 2021 in Pension 0
We are looking @ alternative investment to increase yields – PenOp

By Favour Nnabugwu

 

The Pension Fund Operators Association of Nigeria (PenOp), is looking has said it is investment alternative aside from the government bonds and treasury bills to increase returns on investment as pension funds asset suffered a N51.30 billion decline in February.

The Chief Executive Officer of PenOp, Mr. Oguche Agudah, said this recently at a virtual training organized by PenOp for members of the National Association of Insurance and Pension Correspondents (NAIPCO).

Agudah who noted that the pension fund assets decline of N51.30 billion in February was mainly attributed to the depreciation in the prices of Fixed Income Securities (FISs) in the trading portfolios of the Approved Existing Schemes (AES), RSA Funds II and IV and Closed Pension Fund Administrators (CPFA), explained that the loss in percentage is minimal when subtracted from the N12.29 trillion pension asset.

He said, “If you examine the N51.30 billion depreciation from the N12.29 trillion pension funds in January 2021, you will notice it is not even up to 0.01 per cent, so the percentage loss here is minimal.

“However, we know there are concerns about the decline in the pension value of assets and the honest truth is that pension funds need to invest more in other assets classes outside of the government bonds and treasury bills which are the safest. So, safety is the first option adopted when investing in any asset”

“Currently pension funds cannot invest in foreign bills because there are regulations which need to be approved by the government. However, we are looking out for other various outlets and areas where the funds can be invested; areas like private equity, but the honest truth is that we need to balance between safety and returns. Notwithstanding, the industry is looking at other alternative investment instruments”, Agudah maintained.

For her part, the Head of Media, Communications and Branding Committee, PenOp, Mrs. Amaka Andy-Azike, explained that the decline in the pension funds are unrealized losses according to the terms of the equity market but pension funds operators are sourcing for other means to increase the yields.

“As operators, we focus more on the safety of funds when investing even as we try to also give fair returns on your investments. The decline in pension funds was because of the market volatility; the money market, bonds and treasury bills have been fluctuating due to the nature of what the economy experienced last year and is still going through.

“Fortunately, as we speak, the yields have increased greatly. Before now, for instance, our money market yield was like 0.5 to 2 per cent but now some banks are offering 10 per cent.

“Indeed, the prices of bonds also decline; it was trending for 6 per cent in some areas for long-term and 4 per cent for short to medium term but today, yields on bonds have started trending upwards. So, if you do a revaluation of the previous loss on pension funds, you will discover that it is not up to the N51 billion.

“Also, it is worthy to note that in the equity market most of these losses are not actual losses, they are unrealized losses because when the equity market goes up again, these yields will rebound and you will get much more. So, some of these losses are not realized losses and some have been corrected because there is increase in yield now in all our instruments; and we are currently looking out for other platforms that are safe to invest the funds. So, for us, the safety of your funds come first in all investment we partake”.

Patoma Admin by — May 4, 2021 in Pension 0