The National Pension Commission (PenCom) has called on pension fund administrators
(PFAs) to diversify their portfolios by increasing investments in alternative assets to boost
returns and ensure long-term sustainability.
PenCom’s Director-General, Omolola Oloworaran, made the appeal at a sensitisation
workshop in Lagos for Chairpersons of the Board Investment Strategy and Risk
Management Committees of PFAs, focused on alternative asset investment.
Oloworaran revealed that over 80 per cent of pension fund assets are currently tied up in
fixed-income instruments, with Federal Government securities alone making up 62 per cent
of the total N24.11 trillion in assets as of May 30, 2025.
She emphasised that the challenging macroeconomic landscape characterised by inflation,
exchange rate volatility, and reduced purchasing power demands more flexible and robust
investment strategies.
“In this environment, alternative assets offer a strong complement to the core investment
strategies of pension funds,” she said. “Investments in infrastructure and private equity, in
particular, align well with the long-term nature of pension liabilities, create diversification
opportunities, and can improve risk-adjusted returns.”
Oloworaran noted that an overemphasis on liquidity as a measure of safety has hindered
PFAs from fully unlocking the investment potential of pension funds, despite Nigeria’s
demographic advantages.
She reminded PFAs of their fiduciary responsibility to Retirement Savings Account holders,
urging them to base investment decisions on well-defined strategies and thorough risk
analysis.
“You have a fiduciary duty a legal and ethical obligation to act in the best interest of RSA
holders at all times,” Oloworaran emphasized. “This requires that investment decisions are
grounded in solid strategy, backed by rigorous risk assessments, and fully aligned with the
Commission’s regulatory guidelines.”
She further stressed the need for enhanced oversight of risk management frameworks and
encouraged PFAs to explore approved but less correlated asset classes such as
infrastructure, private equity, and sustainable investments to strengthen portfolio
diversification and resilience.
British Deputy High Commissioner Jonny Baxter also addressed the forum, reaffirming the
UK’s support for Nigeria’s shift toward more strategic mobilisation of long-term capital
particularly through initiatives like the green bond programme and catalytic investments in
infrastructure.
“Nigeria’s pension industry, with over N22 trillion in assets under management, is a powerful
engine of long-term capital and a standout success story,” he said. “However, much of this
capital remains concentrated in traditional instruments. This presents a clear opportunity to
diversify portfolios and channel investments into high-impact sectors that can accelerate
Nigeria’s economic growth.
