March 19, 2024

Pension Funds investment in Infrastructure up 32.9% to N150.8b

Pension fund

By Peter Egwuatu    

Investment in Infrastructure Funds by Pension Fund Administrators, PFAs, has hit N150.8 billion in January 2024, showing a 32.9% Year-on-Year, YoY, increase from N113.485 billion recorded in the corresponding period of 2023.

Latest data released by the Nigerian Pension Commission, PenCom, for the month of January showed that the investment in Infrastructure Funds by the PFAs accounted for 0.82% of the total Net Asset Value, NAV, of the Pension Funds.

Commenting on the development, Analyst / Executive Vice Chairman, HIGHCAP Securities Limited, David Adonri, said: “The infrastructure funds should be made attractive for Fund Managers to invest and this will help meet the infrastructure needs of the country. When Infrastructure Funds have attractive return you will see that investors would investment more on it.  We also encourage more of these funds to be floated in our markets if the corporate entities join hands in bridging the infrastructure gap.”

Also commenting, Victor Chiazor, Analyst/ Head of Research & Investment at FSL Securities Limited, formerly known as Fidelity Securities Limited, said: “The major reason any investment is made by organisations or individuals is for return on investment (ROI). Once yields on any investment drops, the rational thing for any investor to do is to search for higher yielding assets and rebalance their portfolio. PFAs, though operating in a highly regulated industry, are still interested in optimising the return on their assets under management.

Commenting on Infrastructure Funds, Aigbovbioise Aig-Imoukhuede, Managing Director of Coronation Asset Management, said: “With public resources often constrained, private sector investment has emerged as a catalyst for bridging funding gaps and unlocking infrastructure projects that spur innovation, create jobs, and stimulate economic activity.

Government should play a key role in creating enabling environment and incentives that would attract infrastructure funds. It is the imperative of private sector participation in funding infrastructure projects and underscores the pivotal role that infrastructure investments play in driving economic growth and societal advancement.”