Investment of $1b Sovereign Wealth Fund begins in June

Investment of the 1 billion dollar Sovereign Wealth Fund (SWF) will start in June, Mr Uche Orji, the Managing Director of the Nigeria Sovereign Investment Authority (NSIA), has sid.

Orji, who disclosed his at a news conference on Monday in Abuja, said the board of directors, inaugurated seven months ago, had approved the investment allocation formula for the three funds that make up the SWF.

They are; the Future Generation Fund, the Nigeria Infrastructure Fund and the Stabilisation Fund.

The SWF was created by an Act of the National Assembly in 2011 with an initial portfolio of 1 billion U.S. dollars.

He said the Future Generation Fund and the Nigeria Infrastructure Fund would get 325 million U.S. dollars each from the 1 billion U.S. dollars, while the Stabilisation Fund would receive 200 million U.S. dollars.

According to him, the balance of 150 million U.S. dollars will be kept as unallocated to top up each of the funds as the need arises.

“The approved formula is aimed at balancing the infrastructure needs of the current generation and savings needs of the future generation of Nigerians.

“For its initial portfolio of investment, the board of the NSIA has approved an allocation formula to the three funds that make up the SWF.

“Investment in the stabilisation fund will start in June; the future generation has the same timeline but it is a more diversified portfolio with a more complicated process.

“For the infrastructure fund, a very detailed and thorough review of possible investment areas and projects is ongoing,’’ he said.

Orji added that the investments being considered are in healthcare, transportation, water resources, power and housing.

“Our focus is on investments that are both relevant to the current needs of Nigerians, profitable and sustainable at the same time.

“We are ready to go anywhere to get the best deals for Nigeria,’’ he said.

On NSIA’s strategies to guarantee maximum returns for the funds, Orji said for that the stabilisation fund, the approach was to out-source it initially and eventually manage it in-house.

Orji said the stabilisation fund would be invested in relatively safe liquid investment instruments such as the U.S. Treasury Bills and corporate bonds with BBB ratings.

He noted that the investments would be for short duration to minimise interest rate risks.