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Financial experts say private debt funds could solve Nigeria’s shortfall in financing for mid-sized and private equity-backed companies. Unlike private equity, which seeks ownership, private debt focuses on a borrower’s repayment ability.
The launch of Nigeria’s first Naira-denominated private debt fund, FCMB-TLG, aims to address this need. Its private debt fund series 1 offer opened on June 24, 2024, as the Fund Manager, FCMB Asset Management, seeks to raise N10 billion under Series 1 of its N100 billion programm.
Professor Uche Uwaleke, president of the Association of Capital Market Academics of Nigeria (ACMAN), noted that while private debt funds are well-established in markets like the US and Europe, they are still nascent in Nigeria and other emerging markets.
Despite private equity, infrastructure funds, and REITs in Nigeria, local currency private debt funds have been largely absent for qualified institutional investors, high-net-worth individuals, and mid-sized companies.
FCMB Asset Management Limited launched the FCMB-TLG Private Debt Fund, Nigeria’s first naira-denominated fund, in Ma.
The fund, which received regulatory approval, is managed by FCMBAM with technical support from UK-based TLG Capital Investments Limited.
The fund aims to raise capital from institutional investors like pension funds, insurance companies, and high-net-worth individuals.
This capital will then be deployed as corporate debt to companies with commercially viable projects aligned with the UN Sustainable Development Goals, focusing on sectors critical to Nigeria’s economic development.
James Ilori, chief executive of FCMBAM, highlighted the fund’s dual role in providing investment opportunities for professionals and essential capital for sustainable growth in Nigeria. — Business Insider Africa
Online Reporter