Pension Fund Administrators (PFAs) have increased their investments in infrastructure from N37.5 billion in October 2019 to N40.52 billion by November 2019. This was disclosed in the National Pension Commission’s (PenCom) latest monthly report.
The report stated that out of the N9.9 trillion pension fund assets, about N7 trillion had been invested in the Federal Government securities by the PFAs, which represents 70.88% of the total fund size.
According to the commission, as at May 2015, the operators had invested N568 million in infrastructure and increased investments to N1.35 billion in December 2015, adding N2.06 billion in infrastructure bond in December 2016. The investment rose to N6.86 billion in December 2017 and as of the end of September 2018, N17.12 billion had been invested in infrastructure.
The breakdown: Pension fund assets were worth N9.9 trillion as at November 2019, according to the monthly report. Here are some of the assets invested in by the PFAs.
- Federal Government’s securities took a chunk of the pension assets, with the report showing that N4.86 trillion as an investment in Federal government bonds alone.
- This was followed by N2.1 trillion investment in Treasury Bills while investment in Sukuk bond, agency bond, and green bonds, with N78.1 billion, N10.82 billion and N15.64 billion respectively.
- There was a significant drop in cash and other related cash assets when the N45.14 billion recorded in November is compared to the N95.30 billion recorded in October.
- The commission invested a sum of N117.79 billion in state governments’ securities, with state government bonds and corporate bonds taking the balance of 29.12%.
- The N10.82 billion agency bond, according to the commission, was invested in two government agencies, the Nigeria Mortgage Refinancing Company and the Federal Mortgage Bank of Nigeria.
However, a sum of N535.93 billion, representing about 5.36% of the fund, was invested in domestic ordinary shares, while foreign ordinary shares had a total investment of N62.6 billion, amounting to 0.69%.
Similarly, the sum of N5.03 billion was invested by the PFAs in foreign money market securities; N23.62 billion in mutual funds; N224.63 billion in real estate; N32.31 billion in private equity fund.
However, investments in Federal Government securities by PFAs are expected to adopt a downward trend due to various monetary policies adopted by the Central Bank.