Aminu Umar-Sadiq, Managing Director/Chief Executive Officer, NSIA


…plus the good, bad and ugly

The Future Generation Fund (FGF), the largest component of funds by assets managed by the Nigeria Sovereign Investment Authority (NSIA), recorded a sizable loss according to its 2022 annual report, a sign that all may not be well with the asset allocation strategy of the Sovereign Wealth Fund.

Losses for the FGF came in at N18.93 billion in 2022, largely as a result of a humongous N41.13 billion net loss on financial assets, as fair value loss on private equity, hedge funds and other securities came in at N32.15 billion.

Meanwhile, for the NSIA as a whole while personnel expense was kept in check as it was down 3%, general and administrative expenses jumped 77.3% to N1.6 billion, while travel expenses increased by 155% to N478.2 million, compared to 2021 levels.

The Future Generation Fund (FGF) is one of three funds managed by the NSIA and was set up to “invest in a diversified portfolio of appropriate growth investments in order to provide future generation of Nigerians a solid savings base for such a time as the hydrocarbon reserves in Nigeria are exhausted.”

Because the fund uses a plethora of active global asset managers (up to 49 different fund managers were counted by MoneyCentral from Goldman Sachs to obscure names like Edgbaston Investment Partners), instead of a simplified index fund or Exchange Traded Fund (ETF), strategy to gain exposure to global markets, it paid higher investment management fees, despite the poor performance.

Investment management fees for the FGF came in at N1.416 billion for the 2022 period, up 19% when compared to the 2021 period.

Operating and administrative expenses for the FGF also surged by 195% to N2.92 billion, despite the loss.

The FGF assets stood at N595.97 billion as at year-end 2022, compared with N374.8 billion for the Nigeria Infrastructure Fund and N60.93 billion for the Stabilisation Fund.

Total assets managed by the NSIA at year end 2022 stood at N1.032 trillion or $2.29 billion (Effective FX closing rate as at 31 December 2022 was N448.55/ US Dollar).

NSIAs Total comprehensive income of N96.96 billion for the year 2022, was down -34%, compared to 2021 levels.

Other highlights from the NSIA 2022 Annual Financial report

The Good: Profit from investments in FMCU, AKTH & LUTH

The NSIA booked infrastructure operating revenue of N3.186 billion representing 100% of revenue which came from its healthcare facilities and profit up 58.3% to N2.26 billion in 2022.

Revenue from healthcare facilities represented revenue...

https://moneycentral.com.ng/exclusive/article/nsia-2022-annual-report-fgf-loses-n18-93bn-as-operating-travel-expense-jump/