Nigeria Sovereign Wealth Fund to Start Investing in June

Nigeria’s $1 billion sovereign wealth fund will start investing in June, as its board has approved the investment policy statements for the three funds it includes, Chief Executive Officer Uche Orji said.
The SWF, inaugurated in October, was set up to invest savings made from the difference between budgeted oil prices and actual market prices. Africa’s biggest oil producer relies on crude exports for more than 90 percent of foreign income and about 80 percent of government revenue, according to the central bank, making it vulnerable to swings in prices.

The future generations fund and the infrastructure fund will each account for 32.5 percent of total holdings, Orji told reporters today in Abuja, the capital. The stabilization fund will receive 20 percent of savings in the fund, he said.
 
The composition of the fund reflects “the need of infrastructure for the current generation and the need of future generations, which is savings,” he said.

The future generations fund will invest “across the spectrum” globally in equities, fixed income, private equity, and real estate, and aim for returns that beat inflation, Orji said.

The stabilization fund will invest in “safe, liquid instruments,” such as treasuries and investment-grade corporate bonds, he said. The fund, which will also invest globally, will be outsourced initially “and soon be transitioned to in-house management,” he said.

The infrastructure fund will invest in areas such as housing, agriculture, power, water resources, health care, and transportation, he said.

The stabilization and future generations funds will start investing in June, while the infrastructure fund will begin investing in the second half of the year and is restricted to investing only in Nigeria, he said.

The remaining $150 million is currently not allocated in any of the funds. “The idea is to allow us the flexibility as opportunities arise to top up each of the other funds,” Orji said.