By ZAKA KHALIQ
The Managing Director, Lancelot Ventures Limited, Mr. Adebayo Adeleke said the over N3.8 trillion could be invested in key sectors of the economy, just as being done in advanced countries.
Adeleke, who stated this at the Nigerian Insurance and Pension Awards organised by Inspenonline Media in Lagos, added that pension fund operators were too conservative as they prefer to invest in government securities, preferably, bonds, rather than critical sectors of the economy.
According to him, "85 per cent of pension assets is invested in Government Securities, which includes the federal government and states bonds, treasury bills and money market instruments, while 15 per cent is invested in various mix between Private Equity Fund, Infrastructure and mutual fund."
He said the pension assets allocation by Pension Fund Administrators(PFAs) revealed two things, which are; either PFAs are extremely conservative, or that there are no real alternative assets worth investing in, adding that they are constrained by regulation to be extremely conservative.
Adeleke however urged them to drop their conservatism to invest in critical sector of the economy for positive and good return on investment.
Saying that there is urgent need to search, structure, develop and invest in alternative asset classes that have the potential to beat inflation sustainably, he said PFAs can match fund with infrastructure, through connecting and tolled bridges, specialist hospitals on Kidney and Cancer, short rail system, among others.
He pointed out that PFAs, as institutional investors, should not be acting as speculator s or gamblers on the Nigerian Stock Exchange(NSE), adding that "Pension fund is not short term fund like bank deposits. PFAs should be able to do medium/long term investments , between 3 to 25 years."
Stating that Small and Medium Enterprises (SMEs) is an engine room of economic development and social stability, he urged pension operators to invest pension assets in that critical sector of the economy.
Moreover, he challenged the operators not to shrink away from investment in agriculture, which could lead to real mechanized farming for food production, processing and export.
Noting that manufacturing is another lucrative sector that could give good return on investment if pension assets are invested in it, he said the deficit in the textile sector equally depicts a good opportunity for pension assets investment.
He believes that the 17 million housing deficit could be resolved, if PFAs could fund real estate massively.
Return On Investment(ROI) in real estate has consistently exceeded inflation rate and all you need to do is to partner with real estate developers and mortgage firms to realise this, he pointed out.
Source: Daily Newswatch Times
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