PENCOM partners mortgage firms on assets redeployment to capital market

THE Nigerian Pension Commission (PENCOM) said it is currently working with the mortgage refinancing companies to ensure that PENCOM assets are redeployed in the capital market.

  A mortgage liquidity facility or mortgage refinance company is a secondary market institution providing long term funds to mortgage lenders. 

  A mortgage liquidity facility could provide an interim step for Nigeria, between having a fully functioning secondary market and the need to extend the maturity of the liabilities’ base from deposit funding.

  The Director-General of the commission, Mrs. Chinelo Anohu-Amazu, stated this during the one-day dialogue on ‘Capital Market and 2015 Budget’ held in Lagos, at the weekend.

 Anohu-Amazu explained that the commission has amended the 2004 PENCOM Act to enable its assets to be deployed into funding of mortgages.

  These PENCOM assets, according to her, would ultimately be redeployed into the capital market to grow more yields.

  She reiterated the commission’s commitment to continually review its investment regulations to create opportunities for more investment in the capital market.

  The Director-General, who believes that the market would benefit immensely from the nation’s growing pool of pension assets estimated currently at about N4.6 trillion, said:  “We have N4.6 trillion pension asset as at today and pension asset is important on the development of the capital market because the market provides long term fund.

  “With the administration of the pension fund managers, we have created a new set of investors to compete with the banks and foreign investors. This would continue in the stronger sense in 2015. 

  “The commission has come out with regulations for investment of pencom assets that allows much room for investment in the capital market. The 2004 Act was amended to ensure that we could have pension asset deployed into defunding of mortgages. We are working with mortgagee refinancing companies so that our assets will be deployed in capital market.”

  The PENCOM boss, who argued that there was more opportunity for expansion of investment in corporate companies, however, urged capital market regulators to create new products where these assets would be invested.

  “Going forward, emphasis would be placed more on investment in infrastructure and the commission would ensure that when product comes into the market place, we work with stakeholders to ensure that it meets acceptance risk criteria for investment,” she added.