VENTURES AFRICA – The Nigerian Sovereign Wealth Fund (SWF) has invested $200 million, via its management partners, in the US bond market.
The $200 million is the 20 percent stabilization fund set aside from the $1 billion wealth fund, to be used for foreign financial market investment. This led to the appointed UBS, Credit Suisse and Goldman Sachs as managers of the fund.
According to the chief executive of the Nigerian Sovereign Investment Authority, Uche Orji, $50 million of the fund was allocated to UBS last week for asset acquisitions in the US Treasuries, while the $150 million left will be handed over to Credit Suisse and Goldman Sachs this week for the development of a US bond portfolio.
Mr Orji – a former banker – revealed he was initially hesitant to approve the investments due to the overvalued state of the US financial market.
He also noted that the US Federal Reserve meeting coming up this week, will seek to push for the reduction of its bond buying programme, which should make for a fairly valued market, for which he stated that “There is more optimism now.”
Nigeria’s wealth fund, though relatively small in value, is the third largest in Sub Saharan Africa, only behind Botswana’s $6.9 billion and Angola’s $5 billion.
The Ex-Goldman asset manager also stated that the fund would be targeting emerging markets in the further for greater value as leading countries assets are becoming too pricy.
“We find quite a few asset classes, such as US equities, to be a bit rich at the moment,” he said. “We see more value in emerging markets.”