The Nigerian non-pension asset management industry would grow by 34.4 percent and surpass the N10 trillion threshold by 2025, driven by higher yields and increased investments, said Agusto & Co.
Agusto & Co forecasts this robust growth in the industry’s managed assets, projecting an average annual growth rate of 32.4 percent over the next two years, albeit at a slower pace compared to the 45.8 percent average for the previous two years.
The pan-African rating agency predicted that this growth will be driven by increased investments from pension fund administrators and institutional clients, and the strategic allocation of funds in international money markets to mitigate the effects of the depreciating local currency.
According to its recent Asset Management Report which examines the activities and products of non-pension asset management companies in Nigeria, regulated by the Securities and Exchange Commission (SEC), the industry’s offerings are divided into three segments: Collective Investment Schemes (CISs), Segregated Portfolios, and Alternatives.
The industry has over 108 operators managing collective investment schemes, segregated portfolios, and alternative assets it noted.
In 2023, the asset management industry demonstrated resilience through innovative financial products and effective asset diversification in 2023, the report stated.
“Total assets under management (AUM) increased by 44 percent to N5.9 trillion, driven by the growth of dollar-denominated portfolios and increased participation from retail and institutional investors,” it said.
The report further stated that segregated portfolios surpassed collective investment schemes, which contributed 57 percent of the industry’s AUM.
“This was caused by investors shunning the more restrictive and conservative CISs, which accounted for 35 percent. Alternative assets, including publicly-listed private equity, REITs, and infrastructure funds, made up 8 percent of managed assets,” it said.
However, the report stressed that a deterioration in Nigeria’s macroeconomic fundamentals could significantly influence these growth projections.
