Nigerian pension funds anchor ₦20.69bn FCMB-TLG private debt raise

By Olamide Akintunde

Nigeria’s pension funds have emerged as the cornerstone investors in the successful ₦20.69 billion Series II issuance of the FCMB-TLG Private Debt Fund, reinforcing growing institutional confidence in private debt as a source of long-term financing for mid-sized businesses.

The Series II offer, launched by FCMB Asset Management Limited (FCMBAM) and TLG Capital, raised ₦20.69 billion against a target of ₦20 billion under the Fund’s ₦100 billion issuance programme, representing an oversubscription of 3.43percent.

The offer attracted 22 investors, including 12 Pension Fund Administrators (PFAs), with pension funds accounting for 78percent of the capital raised. The remaining investments came from high-net-worth individuals, corporate investors and FCMBAM, which contributed 3percent of the offer in line with regulatory requirements.

The latest fundraising builds on the success of the Fund’s inaugural ₦10 billion Series I issuance in September 2024, which was oversubscribed by 4.3percent.

FCMBAM said the outcome reflects increasing investor confidence in private debt as an asset class and in the Fund’s governance framework.

The FCMB-TLG Private Debt Fund, Nigeria’s first naira-denominated private debt fund, was launched in 2024 to provide long-term local currency financing to mid-sized businesses operating in key sectors, including agriculture, clean energy, education, healthcare, technology, and transport and logistics.

According to the Fund managers, all Series I capital was deployed within 12 months to finance nine companies across its target sectors.

Since inception, the Fund has distributed ₦3.46 billion to investors, representing a cumulative dividend yield of 33.22% as of March 31.

The proceeds from the Series II issuance will be invested in carefully selected private debt opportunities, providing long-term financing to businesses aligned with the United Nations Sustainable Development Goals (SDGs).

The Fund managers said the investments have already enabled portfolio companies to expand food processing, manufacture medical consumables locally, improve clean energy access, digitise essential goods distribution and increase exports, with the new capital expected to expand these efforts.

Chief Executive Officer of FCMB Asset Management Limited, James Ilori, said the strong participation by pension funds validates the firm’s strategy of mobilising domestic institutional capital to finance Nigerian businesses.

“When we launched Nigeria’s first naira-denominated private debt fund, our objective was to demonstrate that domestic institutional capital could be responsibly channelled into mid-sized businesses while delivering competitive returns. The fact that pension funds contributed more than three-quarters of this raise shows that confidence in the model continues to grow,” he said.

Chief Executive Officer of TLG Capital, Zain Latif, described the oversubscribed issuance as evidence that local pension assets are becoming a sustainable source of funding for the real economy.

He noted that the 78percent contribution from pension funds was more significant than the overall amount raised, saying it demonstrates that domestic institutional investors are increasingly supporting Nigerian businesses through local currency financing.

FCMB Asset Management manages more than ₦540 billion in assets and is the investment management subsidiary of FCMB Group Plc, while London-based TLG Capital has invested across 25 African countries and raised more than $350 million since its establishment.