Private equity funds in Nigeria posted a net income growth of over 900% in 2020, from a loss of N110.31 million recorded in 2019 to N883.34 million in 2020. This is according to the performance of various registered private equity and infrastructure funds for Q4 2020, released by the Securities and Exchange Commission.
Of the 10 funds listed, only four recorded transactions in the period with Pioneer LLP posting a 375% year-on-year increase in net income from N160.27 million to N761.15 million. ARM Private equity fund grew its net income by 123% to stand at N202.82 million.
Verod CGO grew its net income by over 500% in 2020 to stand at N335.03 million from a loss of N73.94 million posted in the corresponding period of 2019, while CAN Private equity fund posted a loss of N415.66 million in the period under review.
In terms of infrastructure funds, the 5 listed funds posted a marginal growth of 0.26% in net income from N1.22 billion recorded in 2019 to N1.224 billion in 2020. The three listed firms with transactions recorded profits in the period. Meanwhile, only Chapel Hill Denham grew its net income in 2020.
Top funds by total investments
The total asset under private equity funds management as of December 2020, stood at N30.276 billion, comprising of N24.43 billion as investments, while other assets stood at N5.85 billion.
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- CAN private equity fund records the highest assets under management with N16.65 billion as of December 2020. A 26% increase compared to N13.22 billion recorded in the corresponding period of 2019.
- Pioneer LLP fund follows with a total asset of N8.15 billion, a marginal increase compared to N8.09 billion recorded as of Q4 2019.
- Verod CGO stood at N2.8 billion, while ARM Private equity fund has a total asset under management of N2.67 billion.
- On the other hand, the total asset under infrastructure funds increased by 46.9% from N50.16 billion as of December 2019 to N73.74 billion in 2020. Top on the list was Chapel Hill Denham with N60.98 billion.
- Chapel Hill Denham increased its assets by 42% from N42.89 billion to N60.98 billion. Also, second on the list was Africa Infra Plus Fund with N10.31 billion and ARM/HARITH infrastructure with total assets of N2.45 billion.
What this means
The Nigerian private equity market remains relatively resilient, despite economic challenges in the year 2020 such as the crash in global oil price, economic recession, and exchange rate volatility. There is particular interest in the financial technology service space and the manufacturing sector.
- According to a report by Disrupt Africa, a sum of $150.36 million was raised by Nigerian tech startups in 2020, second only after Kenya, which raised $191.38 million in the same year.
- Typical sources of private equity funding include contributors from institutional and retail investors, including high net worth individuals, pension funds, insurance funds, and banks.
- The Q4 report shows that the private equity and infrastructure funds are growing significantly with increasing interest from HNI’s and angel investors.