NSIA, Old Mutual to invest $700mn in Nigeria's real estate, agriculture sectors

12 Aug 2016
Financial Nigeria

Summary

Uche Orji said both parties have agreed an initial commitment of $100 million for the real estate fund and $50 million for the agriculture fund.

Uche Orji, Managing Director/CEO, Nigeria Sovereign Investment Authority

The Nigeria Sovereign Investment Authority (NSIA) and Old Mutual Investment Group signed an agreement on Friday to establish two new funds to invest in Nigeria’s real estate and agriculture sectors, according to Reuters.

As part of the deal, NSIA and Old Mutual agreed to jointly raise a $500 million fund for real estate investments and another $200 million fund for investments in agriculture.

"We are looking at office towers, commercial real estate," said Uche Orji, Chief Executive Office of NSIA, which manages Nigeria’s sovereign wealth fund. "We are investing equity in agriculture. We are looking at farming with emphasis on export."

Orji said both parties have agreed an initial commitment of $100 million for the real estate fund and $50 million for the agriculture fund.

The NSIA is currently pursuing a Five-year Infrastructure Investment Rolling Plan, which seeks to contribute to development of Nigeria’s infrastructure in five major areas such as real estate, agriculture, health, roads, and power generation.

"The most important thing is infrastructure,” said Kemi Adeosun, the Minister of Finance, who witnessed the signing ceremony. “The problem is that it’s cheaper to move goods from China to Lagos, than move it from Kano to Lagos and that's because we don't have the infrastructure."

The real estate and agriculture funds will each have a tenor of up to 12 years, targeting a return of around 20 percent, said Hywel George, the Chief Investment Officer of Old Mutual Investment Group.

Founded in 2011 with a seed capital of $1 billion, the NSIA received additional $250 million investment capital which was approved by the federal government in November 2015. The agency manages three funds: the Future Generations Fund (40 percent fund allocation), the Nigeria Infrastructure Fund (40 percent fund allocation), and the Stabilization Fund (20 percent fund allocation).


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