July 17, 2014

5.27% of Total Pensions Assets invested in Real Estate

Dolapo Omidire

According to the Nigerian National Pension Commission,  5.27% of total pension fund assets were in real estate properties in May 2014.

Asset Holding
Total FGN Securities  (FBN Bonds and Treasury Bills) 59.86%
Domestic Ordinary Shares 14.21%
Local Money Market securities 11.46%
Real Estate Properties 5.27%
Corporate Debt Securities 1.82%
Foreign Ordinary Shares 1.27%
Other 6.11%

Source: PenCom Monthly Report, May 2014

The Acting Director-General, National Pension Commission, Mrs. Chinelo Anohu-Amazu, said the success of the Contributory Pension Scheme had triggered an exponential growth in pension funds and size of assets under management. Anohu-Amazu explained that  the value of pension assets as a % of the Nigerian GDP has grown from 1.47% in 2006, to 9.57% in 2013 .

The growing investor interest in the Nigeria’s built environment means that assets like property and infrastructure will continue to thrive.

It was also noted that most African governments had been unable to adequately invest in infrastructure, given the decline in traditional sources of government funding and the paucity of funds.

However, recent reports suggest that the private sector has a strong interest in the infrastructure segment. Reuters reported that ARM Infrastructure is close to raising $250 million in the country’s first infrastructure fund, to invest in transport, energy and utility sectors across West Africa, with much of the money coming from pension funds. Other investors include some Nigerian pension funds and other institutional investors such as the African Development Bank.

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