Solomon Okoli, managing director of IEI Anchor Pension, in this interview with Hope Moses-Ashike, says the company restructured to efficiently manage shareholders’ fund in the dynamic pension industry, meet shareholders’ expectations, take the firm to the next level, and other industry related issues. Excerpts:
What informs your restructuring?
IEI Anchor Pension has been restructured with the addition of new people on the Board (the major ones to highlight their pedigree are Tosa, Adewole Adeosun, and Martin Waye, all board members). Secondly, to enhance the management of the team, which also has led to my appointment as the new managing director, and development of human capital.
How re-capitalised and profitable is the company currently?
The company is now fully re-capitalised above the statutory threshold of N1 billion, and shareholders’ fund is now N1.24 billion.
IEI Anchor Pension is now profitable due to efficiency in operations, with it growing assets under management. The above developments have now positioned IEI Anchor Pension to take
a bold step forward to serve customers, compete in the industry and sustain market position. It is presently targeting N3 billion share capital, as it foresees higher performance in 2014,
What was your message to shareholders at your first annual general meeting?
I assured shareholders that the company has overcome its teething problems and is now positioned for sustainable growth and profitability. Consequently, I told the shareholders at the company’s first annual general meeting in Abuja last week that at the moment, the company had extended operations to 30 states of the federation, servicing over 75,000 customers and managing a couple of states’ staff pension.
Already, shareholders of the company voted to increase the company’s share capital from N2.222 billion to N3 billion in a move to accommodate increasing strategic partners’ interests that could help expand the business further.
Can we have a brief history of the company’s fund growth?
The company, within eight years grew shareholders’ funds more than eight folds from N150 million in 2005 to N1.240 billion in 2013, in an expansion efforts that have repositioned the company for better performance even as the half year results have shown.
The long-term plan of the company is to be among tier one PFAs in Nigeria, with the threshold of a minimum of N100 billion of assets under management. The cost of expansion had eaten into the company’s revenue, but I am confident of the company’s outlook.
Why the expansion drive?
Our expansion may not be profitable immediately, but as we scale up over time, we will get through this and we are already seeing this in 2014. We are already seeing a lot of improvements.
We are seeing some of the locations that we opened last year being more profitable now. We are expanding our customer base, and the contribution level is beginning to yield and adding to the bottomline.
However, part of the expansion strategies is to raise the company’s share capital to N3 billion in order to be positioned for possible acquisition moves. People outside are beginning to see the opportunities out there and they are getting interested in what we are doing and want to come in to be part of us. If we do not increase our share capital, cannot accommodate such people to be part of the company. So, we want to have the flexibility and use the capital to expand the business.
Why eye acquisition?
The other thing is to give room for the strategic acquisition. For some of the acquisitions, it is not everybody that want to partner with you you can just take cash from and walk away. They may also want to be part of the owners, therefore, they need that room to also give them a stake.
The other thing is that if the Pension Commission requires PFAs to increase capital, we have the flexibility to adapt faster than those that will start the process when it happens, so we want to be prepared.
For our employees, we want to give some of them a sense of ownership as part of our reward system, which includes the option to be part of the company.
How is your growth prospect like?
The number of retirement savings account (RSAs) grew by 11 percent from N5.3 million in December 2012 to N5.9 million in December 2013. IEI Anchor PFA achieved profitability in 2012 and remained profitable in 2013, despite the decline due to disciplined cost control and execution. We are reasonably confident that the investments we have made in infrastructure and our people so far have positioned the company for a more profitable growth in the future. Our asset Under Management (AUM) for 2012 and 2013 rose by N6 billion per annum in 2012 and 2013, rising to N26.198 billion in 2012 and N32.282 billion in 2013. Our overriding objective remains the protection of capital for our investors so that their funds are available when they need it.
Future outlook of the company
The future of our company and industry is very promising. Awareness for our products and services are growing. For the first time in a long time, we have employees acting as advocates to get their employers participate in the contributory pension scheme. Before now, we had experienced apathy and often resistance from employees. Also, the 2014 Pension Amendment Act has expanded opportunities for our industry through expanded coverage to include employers with three staff, down from five staff monthly. IEI has overcome its teething problems and is now positioned for sustainable growth and profitability.