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Global Private Equity Assets Hit $4.50trn in 10 Years — FMDQ

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The Chief Executive Officer, FMDQ Group, Mr Bola Onadele, says that the global private equity Asset Under Management (AUM) has hit $4.50 trillion in the last 10 years. Onadele disclosed this at the Coronation Merchant Bank interactive session webinar with the theme: “Capital mobilisation through the private markets,” on Monday in Lagos.

Onadele, in his keynote address at the webinar, said that part of these global funds were finding their way into Africa, especially Nigeria.
He, however, urged private companies in Nigeria to tap into the opportunities in the market for growth and development. “As is the case in global private markets (PE) where private equity accounts for 60 per cent of total AUM, private markets in Africa and Nigeria is dominated by the PE segment,” he added.
Onadele, who was represented by the Head, Private Capital, FMDQ Private Markets Ltd., Mr Yemi Osinubi, said that recent survey showed that Nigeria ranks second in the attractiveness of African countries for PE investments over the last three years.  He said that healthcare and life sciences, technology, and agribusiness were viewed as the most attractive sectors over the next three years. Onadele attributed the shift to private capital to the global liquidity crisis of 2008 and 2010. He noted that traditional source of capital has become less available because of the tightening of the Basel two requirements for banks. “Private equity AUM has gone up four times since 2002, since 2015 worth of private equity deal volume has exceeded equity deal in volume,” he said. Onadele said that institutional investors across the world were seeking for alternative channels on their growing funds, especially in infrastructure funds. Speaking on the drivers for PE, he added that raising capital in the public markets  comes with high regulatory requirements and the cost of compliance for public companies were high. “As such, many companies prefer to remain private for as long as possible and take advantage of the private capital market,”Onadele said. According to him, the private markets give investors access to uncommon investment opportunities while providing diversification benefits. He noted that the primary goal for the establishment of FMDQ Private Markets Ltd was to democratise the capital markets by promoting the inclusion of private companies and unleash the largely untapped pool of private capital in Nigeria. Onadele disclosed that the platform had witnessed about N264 billion in notes since it was set up in 2020. “In 2020, about N100 billion in private company bonds were noted on the platform, this half year alone we have about N153 billion in noting. “We had a mix of promissory notes, corporate bonds, Sukuk bonds and we are having first Green Bond that will be noted in the coming month also. “Our equity guideline should be coming out very soon, FMDQ is known for bonds but we have been in discussion with venture capital community, the private equity community on how to develop this equity market for them. “And we think its going to be a robust market for them that will help small to medium term businesses who are trying to raise capital. “Our equity guideline will be out within a month and we will start the noting of equity securities,”he said. Earlier, the Managing Director of Coronation Merchant Bank, Mr Banjo Adegbohungbe, said the interactive session was instituted to stimulate discourse and to clarify an enhanced pertinent economic and societal issues as well as develop credible and workable solutions to common challenges. “It is our intention to continue to facilitate productive engagements like this with relevant stakeholders in order to generate solutions for critical sections of the economy and to add value to our existing and potential customers alike. “We choose the theme of today’s session: “Capital mobilisation through the private markets, specifically because of the potential we see in the private segment of the Nigerian capital market. “This market has had its fair share of missteps in the past but we have begun to observe very credible and increasingly sustainable structures being built to organise the otherwise arbitrary situation earlier observed in this sector of the market. “From technology to renewable energy and various other sectors, it is now obvious that companies need to become publicly quoted to attract much needed capital,” Adegbohungbe said. He noted that with clarity on entry, monitoring and exit, investors would make more informed decisions on the investment opportunities that were abound in credible private companies. (NAN)

Economy

Value Addition is new Standard in Mining Operations – Alake

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The Minister of Solid Minerals Development, Dr Dele Alake has declared value addition as the new indispensable standard for mining operations in the country.

Alake made the declaration in a statement issued by his Special Assistant on Media, Mr Segun Tomori, on Tuesday in Abuja.

The minister had earlier said that the federal government had resolved to ensure compliance to value addition before permitting investors to operate.

He said that his seven-point agenda for the ministry had placed the mining sector on the global front burner since assuming office, which had generated renewed interest from the international community in Nigeria`s mineral resources.

According to the statement, the minister lauded a mining company, African Natural Resources and Mines Ltd.

(ANRML), during an inspection tour in Kaduna State, for its 600 million dollar facility dedicated to the mining and processing of magnetite iron-ore.

He described the move as in line with the government`s resolve for value addition, which is especially apt given President Bola Tinubu`s quest to develop the solid minerals, to boost Nigeria`s economic profile and to meet the global upsurge in energy transition.

“The company aligns with our vision of value addition and beneficiation through its processing of iron-ore, and I urge other mining companies to take a cue from them, “ he said.

He reiterated the government`s commitment to abstain from granting mining licenses to companies that lack the necessary plans for value addition.

The minister acknowledged that resilience, courage and laying a solid foundation were critical in contributing to the company success.

He added that such factors also serve as guidelines for President Tinubu`s administration in its efforts for economic transformation.

“ We have set our minds in this administration and invariably in Nigeria to achieve success, that is why Mr President is restructuring the economy.

“When this company (ANRML) started seven years ago, we saw one of the foundations through the video documentary, the amount of concrete that went in to erect a foundation, just to carry a giant edifice.

“That is what we are going through. When we get through the gestation period, the results will manifest, and it will herald prosperity, “he said.

The minister had stated that no license would be granted to companies wishing to enter the mineral sector without presenting a plan for value addition, such as processing and refining which has multiplier effect on the economy. (NAN)

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Economy

Life Insurance Records 95% Net Claims in Q4 2023-NAICOM

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The National Insurance Commission (NAICOM) says Life insurance business recorded about 95 per cent net claims of the total claims in the fourth quarter of 2023.

A report by NAICOM in Abuja on Tuesday hinted that the record was due to the direct reflection of the ongoing regulatory measures by the Commission regarding claims settlements.

NAICOM said the insurance market average stood at about 71.

4 per cent of the N536.
5 billion gross claims reported at the close of the fourth quarter.

The Commission said the market also recorded retention of about 87.7 per cent for the life business, 54 per cent for non-life while the aggregate market average retention stood at 66.

7 per cent for the period.

It showed that the insurance industry sustained its progressive trend of positive market performance at the close of 2023 fourth quarter.

According to NAICOM, the insurance market recorded a milestone growth to close at N1.003 trillion, representing about 27 per cent growth compared to the N790 billion recorded in 2022.

”Major growth drivers in the non-life segment of the market were oil and gas and fire Insurances contributing 27.3 per cent and 24.1 per cent respectively.

”In a direct reflection to the “no-premium no-cover” policy of the Commission, the outstanding premium continues to decline.

”The premium posted 1.6 per cent as outstanding of all the premiums generated in the market during the period.

”Statistics also shows that the market recorded total assets of about N2.67trillion and capitalisation of N851billion in 2023,” NAICOM said. (NAN)

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Economy

No Mining License without Mineral Value Addition Plans-Alake Warns

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The Minister of Solid Minerals Development, Dr Dele Alake has warned that no mining license would be issued to prospective investors without requisite plans for value addition on minerals.

Alake gave the warning in a statement  by his Special Assistant on Media, Segun Tomori on Tuesday.

He said the Federal Government had resolved to ensure compliance before permitting investors to operate.

He said that his Seven -Point Agenda for the ministry had placed the mining sector on global front burner since assuming office, which had generated renewed interest from the international community in Nigeria’s mineral resources.

He said the support of the executive and the legislature had enabled the ministry to showcase the solid minerals sector globally, resulting in his election as the Chairman of the Africa Minerals Strategy Group (AMSG) at the Future Minerals Forum in Riyadh, Saudi Arabia.

According to him, with the pact that led to the formation of the AMSG, there is now unity of purpose on the African continent regarding the issue of local value addition.

“We are no longer going to allow anybody or license any company that wants to go into the mineral sector without giving us a plan for local value addition,  like processing, refining and this has a multiplier effect on the economy.

“It instantly generates employment rather than a few people carting away lithium, gold, and the likes to other countries to sell.

“These minerals must now be processed in Nigeria, creating more value and beneficiation for local communities where they are sourced, ” he said.

Reports says that the minister had earlier received members of the House Committee on Solid Minerals who were on oversight visit to his office.

The minister commended the lawmakers for their support in repositioning the mining sector, stressing that boosting the economic profile of Nigeria required joint task by both the executive and legislature.

He acknowledged the significant contribution of sub-nationals to mining development, emphasising that state chairmen of  Mineral Resources and Environmental Management Committee (MIREMCO) and five committee members were nominated by state governments. (NAN)

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