Chapel Hill Denham, the fund manager of the Nigeria Infrastructure Debt Fund (“NIDF” or the “Fund”) has announced a quarterly distribution of 4.40 Naira per Unit for the second quarter of 2018, the fund manager said in an exclusive email note to BusinessDay, Wednesday.
The minimum investment amount is N10 million. This is the fourth consecutive and largest quarterly distribution made during the Fund’s first year of operations.
Along with an interim distribution in August 2017, the total cash distributions made by the Fund during its first year of operations have aggregated to 17.10 Naira per Unit- that gives a compounded annualized yield of 18.2 percent.
During the first full year of operations, NIDF achieved a total return of 29.7 percent. That return was primarily in the form of cash distributions, along with issue of bonus units (5.10 percent in February 2018) and gains in the Net Asset Value of the Fund’s units.
During Q2 2018, the yield of the Fund’s portfolio was 18.55 percent, which is nearly at 500 basis points premium to the prevailing average yield on 10-year FGN bonds.
The average yield on 10-yr FGN bonds was 13.2 percent at the secondary market, Wednesday, according to FMDQ data.
Commenting on the quarterly distribution and the Chapel Hill Infrastructure Fund’s performance during its first year of operations, Bolaji Balogun, Group CEO of Chapel Hill Denham and Fund’s CIO, said: “We are extremely pleased with the NIDF’s performance during its first year of operations.
“We have delivered to our unit holders consistent and predictable returns, along with low volatility and principal preservation. This is exactly what we had set out to do when we launched the NIDF,” Balogun concluded.
Commenting on the Fund’s activities during the year, Anshul Rai, CEO of NIDF, said: “NIDF seeks to channel institutional capital, particularly from the pension industry, into productive infrastructure for Nigeria, which is critical to overall economic and social development, as well as diversification of the economy away from oil & gas.
The Chapel Hill Denham Nigeria Infrastructure Debt Fund is the first and only infrastructure debt fund dedicated to and domiciled in Nigeria.
Helped by higher oil prices and stable production, Nigeria exited its worst recession in a quarter of a century in the second quarter of 2017, but growth remains fragile, with dilapidated infrastructure holding back Africa’s most populous nation, set to become the third most populous nation in the world by 2050.
The country’s infrastructure deficit is estimated at USD $3 trillion for the next 30 years, according to estimates by consulting firm, Price Waterhouse Coopers (PWC)
The infrastructure deficit implies that the 2018 budget allocation for infrastructure spending is marginal at less than 3 percent of required annual funding (USD300 billion), an indication of the need to mobilise private capital to fund the country’s every growing infrastructural need.
NIDF’s current portfolio consists of senior loans to over a dozen projects spread across different states and the geo-political zones of Nigeria.
In addition to the financial returns achieved, NIDF also measures and reports on the “development outcomes” from its investments.
“Its investments have not only led to additions to Nigeria’s infrastructure stock but also supports and creates thousands of jobs and reduce greenhouse gas emissions,” Rai added.
The Fund is classified as an Infrastructure Fund under the relevant rules and regulations of the Securities & Exchange Commission, Nigeria and the National Pension Commission, Nigeria.
The Fund’s Units are listed on the FMDQ OTC Securities Exchange, Nigeria. The Fund has registered a programme for issuance of up to two billion Units with par value of N200 billion.
NIDF is sponsored by the Chapel Hill Denham group and Chapel Hill Denham Management Limited act as the Fund Manager of NIDF. The Fund Manager is rated “A” by Augusto & Co.
Investors in the NIDF Series I and II include the Nigeria Sovereign Investment Authority, Pension Fund Administrators, Closed Pension Fund Administrators, Insurance Companies and the fund distributes at least 95 percent net income to investors quarterly.
