IGI Pension Fund Managers Limited, a Pension Fund Administrator (“PFA”) licensed by Nigeria’s National Pension Commission (“PenCom”), has been bought by Radix Capital Partners, a Lagos-based investment firm.
Radix, licensed by the country’s Securities and Exchange Commission (SEC) as an investment banker, has bought a majority stake in the pension manager on February 15, 2017. Terms of deal were not disclosed to BusinessDay by any of the parties as calls and emails sent to IGI Pensions for details of the deal were not answered.
“We have closed the deal from regulatory angle, including approval for change of name,” said a source close to one of the parties who asked not to be named. “IGI PFA will soon become known as Radix Pension Managers.”
Information on the website of Radix said that a new a new board of directors and executive management team have been constituted to lead the PFA following the acquisition.
The PFA has an authorised and paid-up share capital of N1.25 billion, according to information from its website, 25 per cent above the than the regulatory requirement of N1 billion.
There have been some M&A activities in the pension industry, with Access Bank selling its 17.56 per cent equity stake in Stanbic IBTC Pension Managers Limited in the first quarter of this year to Stanbic IBTC Holdings Plc.
| SUMMARY OF PENSION FUND ASSETS AS AT 28 FEBRUARY 2017 | ||||||
| ASSET CLASS |
AES |
CPFAs |
RSA ACTIVE FUND | RSA RETIREE FUND | TOTAL ASSETS | |
| N’ Million | N’ Million | N’ Million | N’ Million | N’ Million | Weight % | |
| Domestic Ordinary Shares | 91,468.30 | 56,883.24 | 318,713.31 | 2,108.59 | 469,173.45 | 7.45% |
| Foreign Ordinary Shares | 0.00 | 88,954.77 | 0.00 | 0.00 | 88,954.77 | 1.41% |
| FGN Bonds | ` | 362,799.45 | 2,723,206.46 | 306,812.17 | 3,706,402.35 | 58.84% |
| T-Bills | 115,045.08 | 110,825.29 | 566,347.15 | 59,205.51 | 851,423.03 | 13.52% |
| Agency Bonds (NMRC & FMBN) | 0.00 | 289.63 | 76,855.94 | 5,295.89 | 82,441.46 | 1.31% |
| State Govt. Securities | 18,610.36 | 12,869.25 | 100,850.53 | 18,037.94 | 150,368.08 | 2.39% |
| Corporate Debt Securities | 28,615.66 | 48,285.98 | 144,261.23 | 37,178.24 | 258,341.11 | 4.10% |
| Supra-National Bonds | 0.00 | 2,418.91 | 6,551.77 | 3,378.91 | 12,349.60 | 0.20% |
| Local Money Market Securities: | ||||||
| Banks | 40,622.24 | 23,600.51 | 266,273.81 | 37,399.09 | 367,895.64 | 5.84% |
| Commercial Papers | 1,027.11 | 2,540.29 | 10,959.72 | 2,236.39 | 16,763.51 | 0.27% |
| Foreign Money Market Securities | 0.00 | 5,188.43 | 0.00 | 0.00 | 5,188.43 | 0.08% |
| Open/Close-End Funds | 2,233.77 | 2,238.19 | 4,715.18 | 0.00 | 9,187.13 | 0.15% |
| Reits | 50.90 | 663.41 | 9,241.16 | 0.00 | 9,955.47 | 0.16% |
| Real Estate Properties | 89,757.46 | 127,117.59 | 0.00 | 0.00 | 216,875.05 | 3.44% |
| Private Equity Fund | 0.00 | 12,310.32 | 5,502.15 | 0.00 | 17,812.47 | 0.28% |
| Infrastructure Fund | 0.00 | 1,176.37 | 1,045.29 | 0.00 | 2,221.66 | 0.04% |
| Cash & Other Assets | 490.93 | 25,268.22 | 4,262.83 | 3,559.77 | 33,581.76 | 0.53% |
| Net Assets Value | 701,506.09 | 883,429.84 | 4,238,786.54 | 475,212.49 | 6,298,934.95 | 100.00% |
Source: PENCOM
Data from the National Bureau of Statistics and that more than 7 million people have contributing to Nigeria’s contributory pension industry. The contributory pension scheme (CPS) was introduced in Nigeria in 2004 ensure prompt and regular payment of retirement benefits to employees in the public and private sectors of the Nigerian economy, and to “assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age”.
The Net Asset Value of the pension assets was N6.29 billion as at 28 February 2017, according to information from the National Pensions Commission (PENCOM). Industry analysts say that the pension assets will grow substantially as more employers comply with the pension reforms act.
Active contributions constitute 67.29 per cent of the pension assets, according to NBS data.
In an advisory outlook on the Nigerian pension industry published in 2016, PWC said that Nigeria’s informal sector, which currently employs 70% of the country’s working population, has not been covered by the pension scheme. There is no doubt that to achieve PenCom’s corporate objective of extending CPS coverage to at least 20 million Nigerians by 2018, coverage will need to be extended to the informal sector, the PWC outlook said.
PENCOM has moved to bring the informal sector into the industry with introduction of the Micro pensions, a scheme targeted at Self-employed people.
Close to 74 per cent of Nigeria’s pension funds is invested in Federal government securities, according to data from PENCOM.
INNOCENT UNAH
