Safety, liquidity, returns of the fund is critical to Pension Fund Operators says PenoP Exc Sec

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By Benjamin Ameh

 
“Pension fund operators mantra has always been safety first, followed by liquidity and return said Ms. Susan Oranye, the Executive Secretary, Pension Fund Operators Association of Nigeria (PenOp).”

 

 

The Executive Secretary, Pension Fund Operators Association of Nigeria (PenOp), Ms. Susan Oranye, said Safety, liquidity and returns are major considerations for pension funds operators before investing pension funds in any business.

 

 

Speaking on the reasons why operators are reluctant to inject much of pension funds in the capital market, Oranye noted that Pension Fund Administrators (PFAs) take their role as fiduciaries of other people’s savings extremely seriously, so they are guided by the ‘Trifecta’(safety, liquidity, then returns).

 

 

Private equity, she said, offers higher returns but nevertheless its involved higher risks, though the operators are not averse to investing in equities; but that they will only do such investments decision through safe instruments or vehicles.

susan penoP
Executive Secretary, Pension Fund Operators Association of Nigeria (PenOp), Ms. Susan Oranye
 

“We must see that there is a very clear path of getting invested capital back, plus a fair return. Our mantra has always been safety first, followed by liquidity and return. Remember that retirees will be paid with cash, not brick or mortar.

 

 

“There is need for some kind of credit enhancement to make the investments more attractive. This could come by way of partial or full guarantee of say, the Federal Government of Nigeria. The current PenCom’s guidelines have widened the playing field by allowing the fund to be invested in many alternative asset classes which including Private Equity, infrastructure bonds/funds, mortgage backed securities etc, so there is a diversified range of assets we can invest in going forward.

 

 

Oranye reiterated that the challenge to investment of funds is the quality of the available proposals, adding that the operators emphasises safety and liquidity over return.


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