By Peter Egwuatu
A new vista of investment opportunity has opened to investors who are interested in earning attractive returns in the medium to long term as BGL Asset Management Limited shops for N2.5 billion through Sapphire and Nubian funds.
The company, on Thursday finalised all arrangements in connection with the offer for subscription of 2 billion units of BGL Sapphire Fund of N1.00 each at par and BGL Nubian fund of 500,000,000 units of N1.00 each at N1.00 per unit.
Speaking at the completion board meeting to signal the commencement of the offer for subscription of the two Funds in Lagos ,the Chairman of BGL Asset Management Limited, Albert Okumagba, said the principal sum invested in the fund is guaranteed against any diminution in value, provided the units are held for a minimum of three months.
According to him, “BGL Sapphire Fund aims to achieve competitive returns for investors interested in earning attractive returns in the medium to long term by investing in a diversified portfolio of investment grade fixed income securities”.
During the offer period, he explained that units in the Fund may be purchased at the subscription price. Subsequent to the offer period, he added that additional units in the Fund would be created and purchased on demand by subscribers on an on_going basis at a price computed in accordance with the Securities and Exchange Commission’s approved basis for computing the offer.
Okumagba added that the Fund would be open-ended and investors would be at liberty to subscribe to its units through the Fund Manager after the Initial Public Offer. Although the Fund has an initial target of 2 billion units, he said the Fund Manager would issue additional units of the Fund to subscribers on demand after the initial tranche of 2 billion units has been fully subscribed.
The Fund opens on October 4 and closes on November 10, 2010.
Okumagba said the BGL Nubian Fund also aims to achieve superior returns for investors interested in earning returns in medium to long term by investing in equities, money market and fixed income instruments such as bonds, treasury bills, and treasury certificates in Nigeria.
According to him, a minimum of 70 per cent of the assets of the Fund would be invested in equities while not more than 30 per cent would be deployed in fixed income and money instruments, stressing that the Fund is appropriate for investors who wish to subscribe on behalf of their wards or dependents as a matter of securing their future. The Fund which is open_ended has an initial target of 500,000,000 units, opens on October 4 and closes on November 10,2010.
The Managing Director of BGL Asset Management Limited, Mrs Modupe Mujota, explained that the Funds offer an opportunity to achieve good returns while minimising risks, from a diversified portfolio of investments, which may not otherwise be available, in significant quantities to individual investors.
She noted that the Funds also offer an opportunity to subscribers for units on behalf of and in the name of minors or charitable organisations, adding that when such minors reach legal maturity, they can either continue with the investment or redeem some or all of the units held in their name, provided that they hold the number of units prescribed by the manager from time to time.
According to Mujota, BGL Sapphire Fund would invest in a number of individual bonds of varying maturities and features, noting that historically, bonds have offered a higher yield than money market instruments, and exhibited less volatility than stocks.
In addition, he said, the return on bonds has often offset the negative return on stocks during periods of market downturn, stressing that ‘’as a result, adding bonds to an all-stock portfolio generally lowers overall portfolio risk.
She however, disclosed that the BGL Sapphire Fund is authorised and registered in Nigeria as a Unit Trust Scheme under Section 160 of ISA, adding that the Fund is governed by the Trust Deed with UBA Trustees Limited as the Trustee. Both Oceanic Bank and UBA Plc are the receiving banks for the Funds while BGL Securities Limited is the Stockbroker to the offer.