The Pension Funds Administrators (PFAs) have invested N155.44 billion out of the total funds under the Contributory Pension Scheme in real estate properties as of the end of September 2021, data from the National Pension Commission (PenCom) have revealed.
The PenCom data on monthly pension fund portfolio showed that the total funds under management stood at N13tn as of September.
Other investment portfolios where the funds were invested included FGN securities; domestic and foreign ordinary shares; and corporate debt securities, comprising corporate bonds, corporate infrastructure bonds, corprate green bonds and supranational bonds.
The funds were also invested in local money market securities, comprising bank placements, commercial papers and foreign money market securities.
The PFAs invested the rest in mutual funds, comprising open/close-end funds, private equity funds, infrastructure funds, cash and other assets.
Speaking on real estate investment, the Group Managing Director/Chief Executive Officer, CFL Group, Mr Lai Omotola, highlighted the need to invest in real estate.
“Construction remains the fastest way of getting out of recession because of the large value chain to the economy towards creating jobs”, he said.
According to a report by Augusto & Co, a pan-African credit rating agency, the Nigerian pension industry’s net assets are expected to hit the N20tn mark by 2023.
It said in its 2021 insurance industry report that the growth in the pension industry’s managed assets had been largely driven by investment returns and additional contributions, to a lesser extent.
The report said the industry’s annual contributions over the last five years had averaged N699bn while withdrawals had averaged about N341bn, translating to a net annual contribution of N347bn and accounting for 26.6 per cent of the industry’s AuM growth over the period.
It said the remaining 73.4 per cent of average growth was attributable to investment returns earned on the portfolios.