Actis today completed an investment of $62 million for a majority stake in Sigma Pensions (“Sigma”), a leading Pension Fund Administrator (“PFA”) in Nigeria. Actis is partnering with Sigma’s founder and Chief Executive Officer, Mr Umaru Modibbo and the current management team.
Founded in 2004 and headquartered in Abuja, Sigma was one of Nigeria’s first PFAs and now has over 650,000 registered customers. Working from 11 offices and 32 service centres, it administers and invests funds on behalf of its customer base which spans the entire country. Actis sees great scope for further growth of the business.
The pensions industry in Nigeria remains significantly underpenetrated, with pension assets constituting only c.5% of GDP. Over the last decade, the PFA industry has demonstrated strong growth and is poised for further expansion. There are currently only c. six million pension-holders in a population of c.170 million, with a median-age of only 19, which supports the growth outlook for the industry.
Actis is one of the biggest financial services investors in Africa with over $570m invested in the space; over $1 billion invested in financial services globally and c. $3 billion invested across African businesses overall.
Actis sees tremendous potential in the asset management industry in particular, backing emerging market consumers to secure their future by saving and investing appropriately. Actis has experience in the sector through successful past investments in Alexander Forbes, the largest independent pension fund administrator in South Africa and XP Investimentos, the biggest independent brokerage and asset manager in Brazil.
Natalie Kolbe, Partner at Actis commented on the transaction: “Building on our extensive experience in the asset management and distribution sector, we are very excited to be investing behind a growing consumer demand for future financial protection and well-being in Nigeria. In Sigma, we have identified a well-managed, solid business with ‘best in industry’ back office, IT and operational systems and excellent customer service that can leverage these underlying secular trends.”
Tony Abakisi, Investment Principal from Actis’ Lagos office, added: “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 and 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..”
Mr Umaru Modibbo, Founder and CEO of Sigma Pensions commented: “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.”
Actis was recently named ‘most impactful private equity firm in Nigeria’ by The Lagos Chamber of Commerce and Industry for ‘positively impacting the Nigerian economy and changing the status quo, by developing the Nigerian private sector’.