Pension Fund administrators invested 155.44 billion naira of the total contributory pension scheme funds in real estate at the end of September 2021, according to data from the National Pensions Commission.
PenCom’s monthly pension fund portfolio data showed that the total funds under management stood at N13tn in September.
The other investment portfolios in which the funds were invested included FGN securities; domestic and foreign ordinary shares; and corporate debt securities, comprising corporate bonds, corporate infrastructure bonds, corporate green bonds and supranational bonds.
The funds were also invested in local money market securities, including bank investments, commercial paper and foreign money market securities.
PFAs invested the remainder in mutual funds, comprising open / closed-end funds, private equity funds, infrastructure funds, cash and other assets.
Speaking on real estate investment, Group Managing Director / CFL Group CEO Mr. Lai Omotola stressed the need to invest in real estate.
“Construction remains the fastest way out of the recession because of the economy’s large value chain towards job creation,” he said.
According to a report by Augusto & Co, a pan-African credit rating agency, the net assets of the Nigerian pension sector are expected to reach the 20 billion naira mark by 2023.
He said in his 2021 Insurance Industry Report that growth in pension industry assets under management has been driven largely by investment returns and additional contributions, to a lesser extent.
The report states that the industry’s annual contributions over the past five years have averaged 699 billion naira while withdrawals have averaged around 341 billion naira, resulting in a net annual contribution. of 347 billion naira and accounting for 26.6% of the growth in assets under management of the industry during the period.
He said the remaining 73.4% of average growth was attributable to the returns on investment generated by the portfolios.
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