The PENCom has recently released a draft regulation to guide Pension Fund Administrators on its investments. According to sources, the funds are now in excess of N4.6 trillion (US$22.9 billion).
According to the new draft, as much as 15 % of the total value of pension funds could be invested in infrastructure through infrastructure bonds and an additional 5 % of its funds could be invested in infrastructure through infrastructure funds.
According to a statement released by the Head of Communication, PenCom, Emeka Onuora:
"The infrastructure project shall be not less than N5 billion in value and awarded to a concessionaire with good track record through an open and transparent bidding process in accordance with the due process requirements set out in the Infrastructure Concession and Regulatory Commission Act (ICRC Act) and any regulation made, pursuant thereto and certified by the Infrastructure Concession and Regulatory Commission (ICRC) and approved by the Federal Executive Council (FEC),"
"Some other conditions for the investment of pension assets in infrastructure include that a minimum of 60 per cent of the Infrastructure Fund shall be invested in projects within Nigeria and where an Infrastructure Fund does not have development finance institutions or MDFOs as co-investors, but the fund manager has a minimum investment manager rating of BBB issued by a rating company registered or recognized by SEC, the fund manager shall retain a minimum investment of three per cent of the Infrastructure Fund."
"Where the Infrastructure Fund has development finance institutions or multilateral development finance organisations as co-investors, the fund manager shall retain a minimum of one per cent of the Infrastructure Fund and the fund shall have an advisory board with independent representatives of institutional investors being in majority."
See draft regulation on the investment of pension fund assets: