Information from the desk of the president of Fund Managers Association of Nigeria has it that the Association had predicted an epic 2018 laced with a number of initiatives by the Association to grow the industry. The Association had planned a number of activities that would increase customer awareness, increase customer versus operator interactions as well as work with regulators to create the enabling environment required for members of the Association to thrive. In an attempt to achieve those goals, the president of the Association, Mr. Ononuju Irukwu, while welcoming members to an expectedly rewarding 2018, informed them that three (3) broad goals were up for pursuit in 2018.
These according to him were:
- To grow total Asset Under Management (AUM) from N400 billion to N1 trillion in 2018.
- Introduce new distribution channels for mutual funds.
- Collaborate with other trade groups in the industry to advocate and implement reporting and entry standards for operators.
Below are the highlights of the goals the Association set for itself in 2018.
2018 has come and gone and 2019 is underway, but to what extent was the Fund Managers Association of Nigeria able to achieve those goals. Analyst at Quantitative Financial Analytics combed through available information to find out if those goals were realised. Here are their findings:
Number of Fund Managers
Data gleaned from the capital market operators page of the Security and Exchange Commission’s website shows that there are 89 operators identified as fund managers. That means that the Fund Managers Association’s goal of having 75 registered fund managers was realised. However, similar information from the FMAN website indicates that there are 62 registered portfolio fund managers, 3 private equity fund managers and 1 venture capital fund manager, bringing the total FMAN registered fund managers to 66. This, therefore, implies that the goal of registering 75 FMAN fund managers in 2018 was not realised.
Growth in Number of Funds
It does look like FMAN exceeded their goal of having 88 registered funds in 2018. According to the NAV Summary Report by the Security and Exchange Commission, there were 90 registered mutual funds in Nigeria as at December 31, 2018.
What seemed the most important goal set by the Association seemed to be the least achieved. The Association had planned to reach an asset under management of N1 trillion by the end of 2018.
Unfortunately, and sadly, the total asset under management stood at N0.652 trillion, almost N400 billion short of plan. The growth rate was just 53% compared to the 150% the Association had planned to achieve.
It does not look like the Association achieved its goal of implementing reporting standards for operators as many fund managers still do not report the daily NAVs on their websites as required nor do they have fund fact sheets available on their site. Where available, the factsheets are not standardised as each fund manager decides on what information or data to include or exclude from the factsheet. This area of reporting calls for urgent action as it could act as the driving force for the realisation of all other goals.
Never Too Late
Though the Association failed to achieve its 2018 goals, it is not too late to stay focused on those goals. The non-realisation of the goals implies that the Association and its members need to work harder, become more creative, and come up with strategies that will deepen mutual fund investment in Nigeria as a means of financial, tax and retirement planning.