Pension Fund Administrators Invested 3% in Real Estate
The Pension Fund Administrators (PFAS) has invested less than 3% of Nigeria’s N7.17 trillion pension assets in real estate properties as at the end of September 2017. According to the data source from the National Pension Commission (PenCom) show that Pension Fund Administrators still prefer to invest in Federal Government bonds and treasury bills at the cost of investments in infrastructure that can impact bridge the infrastructure deficit in the country.
The Daily Trust analysed the asset classes with pension fund investments and found that N3.88 trillion has been invested in federal government bonds, translating to 54.09% of the total pension fund assets in the country as at the end of September.
Further analysis showed that as at the period under consideration, PFAs have invested N620.60 billion of pension fund assets in domestic ordinary shares, being 8.66% of the total assets and N98.81 billion in foreign ordinary shares being 1.38% of the assets.
Closely after the Federal Government bonds are Pension Fund Administrators treasury bills with N1.27 trillion invested, being 17.73% of the total assets
Daily Trust also observed that while PFAs are heavily investing in federal government bonds, they are cautious of investing in sub-national bonds and securities, including the ones issued by agencies. For instance, during the period, PFAs invested N5.85 billion in bonds issued by the Federal Mortgage Bank of Nigeria (FMBN) and Nigeria Mortgage Refinance Company (NMRC), translating to 0.08% of total assets.
A total of N155.70 billion have been invested in state government securities, being 2.17% of the total assets while N264.71 billion has also been invested in corporate debt securities, being 3.69% of the total assets. The analysis also showed that investments in local money market securities such as banks, commercial papers and foreign money market securities remain low.
Under local money market securities, PFAs have invested N489.58 billion in banks, N55.42 billion in commercial papers and N26.69 billion in foreign money market securities. Mutual funds, such infrastructure fund and private equity fund, are one of the least assets classes with pension fund investment. Analysis of the data showed that PFAs have invested N24.06 billion in private equity fund, being 0.34% of the total assets while N5.24 billion are in infrastructure fund, being 0.07% of the total asset.