NSIA targets monoline insurance investment option

The Managing Director of the Nigerian Sovereign Investment Authority, Mr. Uche Orji, has said the Authority was considering monoline insurance as part of its investment options even as it says 20 years target is being considered as maximum target for high returns on investments.

Orji, who disclosed this at the Learning Series of the Securities and Exchange Commission (SEC) organised yesterday in Abuja, said everything effort was being committed to the take-off of the $1 billion Fund, including the constitution of the Authority’s Governing Board.

He explained that the 20 year period was necessary in order to address some of the possible fluctuations that the Fund might experience in future, adding that .the Board of the NSIA would announce its first investments, adding that adequate measures had been taken to ensure the safety of the fund.

The NSIA’s Chief Executive Officer, who spoke on the theme “Sovereign Wealth Fund and the Nigerian Capital Market.”, pointed out that to ensure the profitability of the Fund, innovative products were being developed that would help guarantee maximum returns on investment. One of such initiatives, according to him is the creation of monoline insurance.

He said: “One of the best ideas we have seen so far is the creation of monoline insurance. Now we have to appoint somebody to go and develop the idea and get investors and see how that eventually works.

“We are measuring ourselves over 20 years, and have set targets for ourselves. There would be years when we would be able to meet that target and there would be years when we won’t make any profit. But we will try not to lose money in the first year although it will be tough.

We will measure ourselves in a rolling three year basis.. There would be good yields and there would be great yields but not all the time. We will review ourselves from time to time to know how far we are progressing “Most of these countries started the SWF at a time when they had no money and would want into be out in other critical sectors. We are aware of all these issues and will try to invest the money wisely.

We take responsibility and we are independent in all that we do”, Orji said Expatiating further, the investment expert said about seven key sectoral areas had been identified for the investment of the fund. He listed these as road, transport, health care, housing, power and gas, agriculture and water resources.

He said that within the next few weeks, details of how much would be deployed to these sectors sector would be unveiled. While responding to media enquiries on the percentage of the fund that would be invested in Nigeria’s stock market, Orji said there were two tranches of our investment that would be invested in the capital market.

“The first tranche of investment is the emerging market portfolio and there is also the private equity. We are going to be invested in private equity companies here and abroad.”, he said.

In her remarks at the forum, the Director General of the Securities and Exchange Commission, Ms Arunma Oteh , said the purpose of the series was to sensitise Nigerians about the possible ways of financing the country’s huge infrastructure deficit.

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