Actis invests $62 million in Sigma Pensions

The Lagos Chamber of Commerce and Industry recently named Actis the ‘most impactful private equity firm in Nigeria’ for its strong impact on the Nigerian economy so far. As a method of enhancing Nigeria’s economy further, Actis has invested $62 million in Sigma Pensions.

Today, the emerging markets investor completed its investment for a majority stake at Nigeria’s leading Pension Fund Administrator (PFA). According to the company, Actis is partnering with Sigma’s Founder and Chief Executive Officer, Mr Umaru Modibbo and his current management team.

“We are delighted to welcome Actis as a new partner, one that understands our business and brings deep asset management and distribution expertise, as well as an unrivalled track record in Africa. With Actis’ help, we look forward to continuing our growth trajectory and creating more opportunities”, said Mr Umaru Modibbo, Founder and CEO of Sigma Pensions.

The investment is driven by the fact that Actis projects great opportunities to aid further growth for Sigma. Sigma was one of Nigeria’s first PFAs and now has over 650,000 registered customers. Working from 11 offices and 32 service centres, Sigma administers and invests funds on behalf of its customer base which spans the entire country.

Actis is one of the biggest financial services investors in Africa with over $570m invested in the sector; over $1 billion invested in financial services globally and c. $3 billion invested across African businesses overall.

The private equity firm is heavily invested in several business sectors in Nigeria, which earned it an award in 2014 as the ‘Firm of the Year in Africa’ by Private Equity International as well as an ‘African Infrastructure Fund Manager of the Year, 2014’ by Infrastructure Investor.

Although, the pensions industry in Nigeria remains significantly under-penetrated, with pension assets constituting only c.5 percent of GDP, Sigma, ARM Pensions, Stanbic IBTC Pension Managers Limited and several others are changing the narrative. Over the last decade, the Pension Fund Administrator (PFA) industry has demonstrated strong growth and is poised for further expansion. There are currently only c. 6 million pension-holders in a population of about c. 170 million, with a median-age of only 19, supporting the growth outlook for the industry.

Partners at Actis also expressed their commitment towards helping Sigma grow beyond the status quo. “Building on our extensive experience in the asset management and distribution sector, we are very excited to be investing in a growing consumer demand for future financial protection and well-being in Nigeria. In Sigma, we have identified a well-managed, solid business with IT and operational systems and excellent customer service that can leverage these underlying secular trends”, said Natalie Kolbe, partner at Actis on the transaction.

“Sigma sits in an under-penetrated, well-regulated market and has excellent growth prospects. We are excited to be investing in the Nigerian PFA industry and to be partnering with Mr Modibbo as well as a great management team to support growth initiatives, including extending the core business, enhancing the brand and creating a platform for further expansion within Nigeria”, said Tony Abakisi, Investment Principal at Actis, Nigeria.

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