Investment Solutions

Buy-&-Hold Strategy

Capital Markets Based Models

Infrastructure investments provide the opportunity to lock-in predictable long-term returns. We seek to maximise the returns over the asset’s lifetime and, consequently, achieve significant compounded returns for our investors.

Capital Markets Based Models

Listed investment vehicles provide permanent capital required to execute the buy-&-hold investment strategy. The listing also provides liqudity to the initial investors. These capital markets-driven structures also enable portfolio growth and diversification, without the need for investors to commit/block capital over multi-year periods.

Sustainable Capital Structures: Currency

Our investment solutions cater to the specific characteristics of our target markets and provide funding that supports sustainable capital structures.

For markets with available pools of domestic savings, we channel these savings into domestic currency funding solutions not available from other sources.

Low Operating Cost

Sustainable Capital Structures: Currency

We seek to minimise the “cost-to-income ratio” for our investors, through:

simple and transparent fee structures;
raising capital only when the relevant investment pipeline is well matured

Benefits to investors: by investing in infrastructure through PCVs, investors can reap meaningful benefits when compared to traditional, PE-style funds.

Maximise Long-Term Returns

The long useful lives of infrastructure assets means they generate predictable returns over period extending into decades. Investing through PCVs enables investors to benefit from the significant compounding opportunity provided by such cash flows. Being a relatively rare source of long-term capital not otherwise easily available, the PCVs capture the “term premium” for the benefit of its investors.

Greater Portfolio Diversification

Since the PCVs can grow their portfolio over time by raising additional capital for making new investments, all its investors (including the initial ones) benefit from greater portfolio diversification.

Liquidity

PCVs, structured as a corporate or a unit trust, can be easily listed on international/ domestic stock markets. The listing dramatically expands the investor base for the entity, thus benefitting both initial and subsequent investors with greater secondary market liquidity.

Better governance and transparency

PCVs are more easily established and managed with independent oversight of the investment manager. The statutory and legal rights of investors in a listed entity are, arguably, stronger and better enforced. The regulatory requirements for compliance and disclosure on such listed entities are much higher.

Financial Efficiency

PCVs can raise capital in small tranches and match the timing of fundraising with the deal closing. So, investors are not required to block investment capital over long periods typically associated with PE-style infrastructure funds. Use of corporate structure also enables the entities to access short-term funding from banking channels, which improves their cash flow management and overall returns.

Nigeria Infrastructure Debt Fund

Nigeria Infrastructure Debt Fund (“NIDF”) is the first and only listed, domestic currency infrastructure debt fund in Africa. NIDF is a closed-end fund, domiciled in Nigeria and denominated in Naira. The Fund is structured to enable investors to access infrastructure asset class and deliver long-term, predictable returns available from long-dated infrastructure debt investments.

The investment focus of NIDF is on the traditional infrastructure sectors, primarily transport, power, renewable energy, utilities, energy infrastructure (e.g. storage terminals), logistics and other public-private-partnership type investments. To be financially viable, these projects require long-dated senior debt, which is increasingly not available from commercial banks. By creating permanent capital, NIDF supports these projects with long-term financing, in the process generating superior, risk adjusted returns for its investors, almost entirely in the form of running yield.

NIDF invests in cash yielding loans, that:

have predictable cash flows derived from long-term offtake agreements and/or concessions and/or monopolistic assets
enjoy first priority in cashflow waterfall and senior lien on the project assets
generate primarily floating rate returns and capture return premium available from being a scare source of long-term funding
emphasise principal preservation

The initial fund raising for NIDF was completed in June 2017 in partnership with Chapel Hill Denham, Nigeria’s leading Investment Bank & Asset Manager, and it was listed on the FMDQ OTC Exchange in July 2017.