The FCMB Group has notified the Nigerian Stock Exchange of an agreement between its pensions arm, FCMB Pensions Limited, and Aiico Pensions Limited to acquire 96 per cent of the latter.
The move is part of a strategy to grow the Group’s investment management portfolio and build on the synergies between it and the banking portfolio.
It will be recalled that FCMB Group increased its stake in Legacy Pensions (now FCMB Pensions) to 91.6 per cent in 2019 and now has full control of the business.
FCMB Pensions has since grown its assets under management (AUM) to N325 billion with 350,000 customers as at March, while that of AIICO Pensions is estimated at N126 billion with over 240,000. A combined AUM of N451 billion and almost 600,000 customers will take the entire Groups customer base to 8,000,000 and its total AUM (inclusive of all investment management activities) to over N560 billion.
In addition, the enlarged pension business will benefit from FCMBs extensive distribution platform, comprising 200 branches, a strong web and mobile presence; and the recent the launch of its Pensions’ online enrolment platform.
Analysts have broadly positive views of the deal impact for both FCMB Pensions and FCMB Group.
One investment banking analyst described it as “a positive move and a statement of intent from FCMBs management to leverage its non-banking businesses to drive profitability”. Another analyst described this as a “Landmark transaction giving a mid-tier player a great opportunity to bulk up”, further remarking that “We believe the combined entity will be better positioned for stronger organic AUM growth and fee income contribution to the Group’s performance”
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This acquisition is one of several steps, along with digitisation that the company has embarked upon to enhance its market position and competitiveness as the industry braces itself for the commencement of Retirement Savings Account (RSA) portability.
Investment funds’ performance is also receiving greater attention especially in the low interest rate environment. In this regard FCMB Pensions has strengthened its investment committee with the addition of Titi Odunfa Adeoye to its Board of Directors.
Mrs. Adeoye is the Founder and Chief Investment Officer of Sankore. The new Director holds an MBA from Harvard Business School, a BBA in Accounting (summa cum laude) from Howard University and is a Certified Public Accountant (Gold Award).
Mrs. Adeoye’s skills in investment strategy were honed at firms like Goldman Sachs in New York. Her area of expertise is strategies for the creation, growth and preservation of individual or family wealth with a focus on “alternative” asset classes.
Speaking about Friday’s announcement, Ladi Balogun, Chairman of the Board of Directors – FCMB Pensions, remarked that “the business intends to use its scale to positive effect towards investing in the growth of the Nigerian economy while ensuring safety and the most competitive returns for its customers”.