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PFAs can only invest in safe infrastructure —Sigma boss

The Managing Director/Chief Executive Officer, Sigma Pensions, Mr Dave Uduanu, has said that Pension Fund Administrators can only invest in infrastructure instruments that can guarantee the safety of their retirees’ funds.

He spoke at the maiden edition of Sigma Pensions business roundtable forum, where stakeholders deliberated on two themes, which are, ‘Opportunities and pitfalls of alternative investing in Nigeria’ and ‘Nigeria under a rising oil price picture and increasing political risk’.

While speaking on investment in infrastructure, he said, “The key issue with diversification is unavailability of investment instrument. One of the key instruments we could invest in as a means of diversifying the portfolio, infrastructure is not investible.

“When we say it is not investible, it means we don’t have instruments through which we can invest in infrastructure, get a good return and get the money back, so the real question with the PFA is that how do you create diversification in a market where the capital market is shallow? The only person borrowing is the government; the companies, corporates are afraid of coming to us to borrow because our standards are high, much higher than the banks.

“The main thing holding back corporate bonds in Nigeria is corporate governance. A lot of the companies are not interested in opening their books to investors to scrutinise and until we address the issue of corporate governance transparency, we would not see the instruments that will create diversification opportunities for pension funds.”

“The second was on private equity which we think is quite germane because the banking sector is starved of capital, they are not lending anymore and the other sources of capital are pension funds and insurance companies, but according to our regulations, the only way we can invest in the real sector is through private equity fund.”