Business
‘Real Estates Attract Low Pension Funds Investment’
Director-General, Pension Commission (PENCOM) Alhaji Muhammad Ahmed, has said that about 8 per cent of pensions assets has been invested in Real Estate.
Ahmed made this known in an interview with newsmen on Sunday in Abuja.
“As at today, only 8 per cent of the pension assets are invested in real estate and these are indeed legacy assets. They were assets that had been invested before at the pension reform took off.
“For now, pension assets can only be invested in intermediary assets; in order words we cannot invest directly on housing development or any other commercial real estate development.’’
Ahmed said the Commission restricted itself to real estate investment trust or mortgage bank securities because it believed that the market was not fully developed.
He said that it would help the Commission to invest sensible aspects of pension assets if the Federal Government implemented the recommendations of the World Bank document for financial system strategy 2020 fully.
He added: “the fixed income market is quite challenging, especially the corporate governance and corporate bonds.
“As at today, only 3 per cent of the pension assets are invested in corporate bonds.’’
Ahmed said that the process and initiative to improve the corporate bond market had been slow, adding that a committee was set up on it, but most of the issues were yet to be solved.
He said though the commission had 35 per cent allocation for corporate bonds, only 3 per cent had been taken up by pensioners.
“We hope that by the time the issues identified in this book are implemented, we may have emerge, a vibrant corporate bond market,’’ he said.
Last Thursday in Abuja, the World Bank launched a book with recommendations to help the achievement of the Nigeria Financial System Strategy 2020.