NSIA Funds
Future
Generations Fund
Objective
To invest in a diversified portfolio of growth investments to provide future generations of Nigerians a savings base for such time as the hydrocarbon reserves are exhausted.
Initial %Assets Allocation & Size
40% allocation / US$400 million
New % Allocation & Current Size**
30% allocation / US$1bn
Strategic Asset Allocation / Focus Sectors.
Asset Class Allocation
| Public Equity | 25% |
| Private Equity/Venture | 25% |
| Hedge Funds | 17.5% |
| Cash & Other Diversifiers |
7.5% |
| Hedging Assets | 25% |
Mandate / Recent Investments
- Public Equity is split 67% Developed markets and 33% Emerging Markets
- Private Equity Commitment is split roughly 25% secondary and 75% primary interest.
- Absolute returns: Four Hedge fund strategies and two bespoke fund of funds mandates.
- Other diversifiers include strategies such as healthcare royalty, commodity etc.
Expected Average Annualized Returns
US CPI + 400 BPS
Investment Horizon
Long Term >20 years
With effect from 2018, the Future Generations Fund (FGF) began to receive 30% of the core capital contributions to the Authority. The Board’s decision for the restructuring was based on the need to increase infrastructure investment in the country, which would also benefit future generations. The NIF, therefore, started to receive an additional 10% of subsequent fund allocations to the Authority.
The FGF is a long-term investor and has an investment horizon of above 20 years, so it is expected to weather multiple economic and market cycles. Diversification is used as a key risk management tool in achieving the investment objectives and mitigating the effects of volatility and uncertainty on the Fund’s investment.
The Fund has a multi-asset strategy and investments range from traditional assets, such as equities, to alternative assets including hedge funds and private equity. The Board Investment Committee approved a strategy that provides guidelines for the Fund’s investments, in line with its risk and return objectives.
The asset allocation is based on long-term risk and return objectives, with due consideration to volatility, and is diversified across various asset classes. This ensures that risk is mitigated. Due to the Fund’s long-term horizon, the asset allocation is skewed to growth assets which account for 85% of the allocation. The rest is apportioned to inflation hedges (10%) and deflation hedges (5%). External managers are used to gain exposure to these asset classes at this point in the Authority’s life cycle.
