24 June 2014, Abuja – As a result of its investment strategies, the Nigerian Sovereign Investment Authority (NSIA) has revealed that it earned N1.2 billion as at the end of the first quarter of 2014 by investing only 20 per cent of the Sovereign Wealth Fund (SWF).
The agency stated that its first quarter 2014 performance was wholly in line with its projections.
The Managing Director, NSIA, Mr. Uche Orji, who revealed this while briefing the media in Lagos also said that the agency’s audited net profit for the period stood at N1.2 billion.
He pointed out that with the changing interest rate landscape in key global markets, the NSIA would be adjusting its asset allocation strategies to take advantage of inherent benefits.
Speaking on the future generations funds, he pointed out that four hedge fund managers were allocated 25 per cent of the agency’s assets, across various strategies including global macro and long-short equities.
“The best performing is Arbiter, up 12.21 per cent year to date, the worst performing is Laurion which is down 2.8 per cent year to date.
“It should be noted that the managers were selected to have different performance profiles in different market environments.
“It is expected therefore that in times when Arbiter struggles to perform, that a manager such as Laurion will outperform. All in all we believe we are well positioned going into the rest of 2014 having had a strong start to the year,” Orji explained.
On the other hand, under the long-only equity managers, 10 per cent of the assets were allocated to the developed markets of Europe, United States and Japan and 15 per cent broadly across emerging markets.
This took the total allocation to active long-only managers to 25 per cent.
On the emerging markets, he said: “Our timing for allocating capital to emerging markets, in late February 2014, has been excellent as we practically picked the bottom of these markets resulting in strong performance for this asset class.
“Our investment in Edgbaston, an emerging market manager, has performed particularly well since deployment in February, accruing 7.7 per cent to the end of April.”
For developed markets, the NSIA boss explained that his agency has placed an investment with one European manager, Cevian, who hasachieved a performance of 9.8 per cent year to date. According to him, the NSIA deployed capital to the managers in the two other markets in the second quarter of 2014.
Speaking on private equity, he said: “We have made some allocations to two private equity managers – of which one (Z-capital) has already started to provide returns, whilst (Xenon) will commence investment in the coming period.
“We are in advanced stages of evaluating a number of managers focused on Nigeria and should be in a position to report those by third quarter of 2014.
“Private Equity is a long lead time asset class, but expect IRR of at least 20 per cent a year over the life of these funds. Given our time horizon this asset class demonstrates the greatest historical performance.”
The NSIA has funded three commitments in the infrastructure fund namely: the Nigeria Mortgage Refinancing Company, in which it holds 22.7 per cent stake, fund for agriculture finance and the second Niger Bridge.
– This Day
