October 28, 2016

Nigerian Sovereign Wealth Authority Allocates $18.1m to Actis and ACA Funds

Dolapo Omidire

The Nigerian Sovereign Wealth Authority (NSIA) made a capital commitment of $18.1m to Actis Africa Real Estate and African Capital Alliance according to their 2015 year end financial statement. The capital comes from the Future Generations Fund (FGF) which has a 25% private equity allocation and was created by the NSIA Act 2011 to become operational in 2012.

Once commitments of $9.3m and $8.8m were made to Actis Africa Real Estate and African Capital Alliance respectively, the NSIA’s total unfunded commitments at the end of 2015 were $52.3m. Commitments with other private equity fund managers included:

  • Healthcare Royal Partners – $14.7m;
  • Z Capital Partners – $9.5m;
  • Helios Investors – $5.9m;
  • Fund for Agriculture Finance in Nigeria – $4m
  • Euro commitments were €3.5m with Xenon Private Equity.

USD$ Unfunded Commitments with Private Equity Fund Managers

[visualizer id=”7092″]

Source: NSIA

At its creation, 40% of the NSIA’s initial $1bn seed capital was allocated to the FGF. The purpose of the fund is to preserve and grow the value of assets transferred into it, thereby enabling future generations of Nigerians to benefit from the country’s finite oil reserves. The fund’s payout requirements allow it to gain exposure to certain illiquid asset classes such as private equity to increase the potential of achieving stronger risk adjusted returns.

Future Generations Fund Asset Allocation
Future Generations Fund Asset Allocation

In a review given by Uche Orji, the Cheif Executive of the NSIA, he explained: “…the decision to invest in alternative asset classes proved beneficial in 2015 particularly because it ensured that the Authority’s portfolio was relatively immune from market volatility at a time when traditional asset classes suffered significant declines. Alternative assets targeted by the FGF mainly included hedge funds and private equities, both of which in aggregate held up well during the period under review. During the year, five additional private equity fund managers were approved, four which are largely Nigeria/Africa focused.”

On the performance of the entire fund, at the close of the 2015 financial year, total comprehensive income for the fund increased to N26.3 billion, representing a 67% growth; investment income grew by 47% to close at N5.8 billion and total assets recorded a growth of 20% to N213.66 billion at year end. An additional capital allocation of $250m was also approved for allocation to the Authority.

Other new actions from the NSIA include their partnership with Old Mutual Investment Group where the objective is to invest $500 million in commercial, retail and hospitality assets.

Download all the NSIA’s Financial Statements on our Financial Reports tab which has Financial Statements for listed real estate, construction and related companies across Africa.

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