Asides the mortgage institutions in Nigeria giving out loan facilities to the average citizen, Converged Dynamics Capital Services Limited, a financial service company licensed by the Securities and Exchange Commission (SEC) recently concluded on plans to deploy a private equity fund for investments in the real estate sector in Nigeria. The Managing Director of the company, Mr Abiodun Akinniranye, stated over the weekend that the company has engaged both foreign and local service providers towards launching a large private equity-based fund for the Nigerian real estate development.
Although the fund is currently under structuring, he asserted that it would serve the purpose of accelerating the growth of the Nigerian real estate sector and bridging the country’s housing deficit while providing investors with an instrument to invest their funds in properties and the overall real estate sector.
According to him, with a huge housing deficit, which stands at roughly 17 million units, there is no way the government or regular banks could provide the required funding to bridge the supply gap. “Specialized investment vehicles like structured funds are the viable option for large-scale projects in the sector. There are funds out there for the Nigeria market, forget the notion that the international investment community is averse to investing in Nigeria or that our current foreign exchange liquidity challenges are scaring them off. These challenges will reduce and then stabilize. These funds are long-term instruments with investors looking at exit horizons of seven years and above. They realize that Nigeria continues to be a compelling story and the long-term assessment is that we are a viable investment destination,” Akinniranye said. He pointed out that one of the main challenges for the attraction of investments to Nigeria is the lack of appropriately structured financial instruments as investors are interested in the structure of the fund, quality of its investment committee, the service providers and the experience of the fund managers among other details. He said CDCSL has the expertise.
He pointed out that one of the main challenges for the attraction of investments to Nigeria is the lack of appropriately structured financial instruments as investors are interested in the structure of the fund, quality of its investment committee, the service providers and the experience of the fund managers among other details and assuring that the fund will be structured in line with the global best practices and regulatory framework of SEC.