NSIA eyes Sukuk bond market as income surges 343%

Nigeria Sovereign Investment Authority (NSIA) has announced a 343 percent growth in total comprehensive income to N160.06 billion in 2020 as against N36.15 billion the previous year.

Managing director of NSIA, Uche Orji said on Tuesday that the Authority’s investments in international capital markets, improved contribution from subsidiaries and affiliates and exchange gain from foreign currency positions drove the strong performance despite the challenges of COVID-19 last year. He also hinted of plans to launch into the Sukuk bond market to raise additional capital for the several road projects under their management

“We believe we would be coming to the market this year, most likely via Sukuk programme. We are in preparation for this to help us complete the road projects,” Orji stated as he presented the 2020 audited financial statement.

Excluding devaluation gain of N51 billion, the NSIA reported core income of N109 billion compared to N33.07 billion in 2019.

This is the 8th year of straight profit by the NSIA which manages Nigeria’s well over $1.6 billion Sovereign Wealth Fund.

It equally achieved a 51 percent growth in total assets to N981.78 billion from N649.85 billion in 2019 and reported a 33 percent growth in net assets to N772.75 billion from N579.54 billion

“All financial numbers were very strong for us. And this is because our investment strategies, especially in the capital market paid off for us in 2020 and we were able to generate remarkable income from all core investment activities,” Orji announced at a virtual press conference Tuesday morning.

Even though 2020 showed impressive results for NSIA, Orji is, however, of the view that this is not a pointer to a bullish 2021, although the “fund is positioned well”.

NSIA manages Nigeria’s Sovereign Wealth Fund under three broad classes - the Future Generation, Stabilsation and Infrastructure Funds.

In 2020, it received additional contribution of $250 million from government and provided first stabilisation support to the FGN of $150 million withdrawn from stabilisation fund.

It equally received $311 million from funds recovered from late General Abacha from the US Department of Justice and Island of Jersey for deployment towards the Presidential Infrastructure Development Fund (PIDF) projects of AbujaKaduna-kano Highway, Lagos Ibadan Expressway and Second Niger Bridge.

Orji explained that under the Future Generations Fund, NSIA significantly changed asset allocation strategy, and expanded the stable of hedge fund managers. It also made commitments in the Venture

Capital (VC) sector and commenced direct trading and co-investments in equities with selected VC and private equity managers.

The asset classes which were top performers for the year include, VC investment returns which were up 29 percent in $ terms; hedge funds which went up 11 percent; emerging long only equity mangers was also up by 22 percent; developed long only equity managers up 19 percent, and private equity up 13 percent for the year.

Some managers in the long only asset classes were up more than 50 percent in the year as most took advantage of the supportive environment provided by central banks.

Orji observed that the only underperforming asset classes was other diversifiers, which among other investments such as healthcare royalties, commodities, and real estate, include commitments to aircraft leasing funds which had an understandably poor year due to impact of covid-19.