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Global private equity assets have reached $ 4.50 billion in 10 years – FMDQ

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Global private equity assets have reached $ 4.50 billion in 10 years – FMDQ

By Chinyere Joel-Nwokeoma

FMDQ Group CEO Mr. Bola Onadele said global private equity assets under management (AUM) have reached $ 4.50 trillion in the past 10 years.

Onadele revealed this during the Coronation Merchant Bank interactive session webinar on “Capital mobilization through private markets” on Monday in Lagos.

Onadele, in her opening speech at the webinar, said a portion of these global funds are heading to Africa, particularly Nigeria.

He, however, urged private companies in Nigeria to exploit market opportunities for growth and development.

“As is the case in global private markets (PE) where private equity represents 60% of total assets under management, private markets in Africa and Nigeria are dominated by the PE segment,” he said. he adds.

Onadele, who was represented by the Head, Private Capital, FMDQ Private Markets Ltd., Mr. Yemi Osinubi, said a recent survey showed Nigeria ranked second in attracting African countries for investment. in private equity over the past three years.

He said healthcare and life sciences, technology and agribusiness were seen as the most attractive sectors over the next three years.

Onadele attributed the shift to private capital to the global liquidity crisis of 2008 and 2010.

He noted that the traditional source of capital has become less available due to the tightening of the two Basel requirements for banks.

“Private equity outstandings have quadrupled since 2002, as the volume of private equity transactions in 2015 exceeded the volume of capital transactions,” he said.

Onadele said institutional investors around the world are looking for alternative channels for their growing funds, especially in infrastructure funds.

Speaking on the drivers of the EP, he added that raising capital in public markets comes with high regulatory requirements and the cost of compliance for state-owned companies is high.

“As such, many companies prefer to stay private for as long as possible and take advantage of the private capital market,” Onadele said.

According to him, private markets give investors access to unusual investment opportunities while offering diversification benefits.

He noted that the main objective of the establishment of FMDQ Private Markets Ltd was to democratize the capital markets by promoting the inclusion of private companies and unleashing the largely untapped pool of private capital in Nigeria.

Onadele revealed that the platform had registered around 264 billion naira in banknotes since its inception in 2020.

“In 2020, around 100 billion naira of private corporate bonds were rated on the platform, this semester alone we have around 153 billion naira to note.

“We had a mix of promissory notes, corporate bonds, Sukuk bonds and we have the first Green Bond which will also be noted in the coming month.

“Our guideline on equities should come out very soon, the FMDQ is known for bonds, but we spoke with the venture capital community, the private equity community, on how to develop this equity market for them. .

“And we think it’s going to be a strong market for them that will help small and medium businesses that are trying to raise capital.

“Our equity guideline will be released in a month and we will start rating equity securities,” he said.

Previously, the Managing Director of the Coronation Merchant Bank, Mr. Banjo Adegbohungbe, said that the interactive session was instituted to stimulate discourse and clarify enhanced relevant economic and societal issues as well as develop credible and achievable solutions to common challenges.

“We intend to continue to facilitate productive engagements like this with relevant stakeholders to generate solutions for critical sectors of the economy and add value to our existing and potential customers.

“We choose the theme for today’s session:” Raising capital through private markets, especially because of the potential we see in the private segment of the Nigerian capital market.

“This market has seen its fair share of missteps in the past, but we have started to see very credible and increasingly sustainable structures being built to organize the otherwise arbitrary situation seen previously in this area of ​​the market.

“From technology to renewables and various other sectors, it is now clear that companies need to go public to attract much-needed capital,” Adegbohungbe said.

He noted that with clarity on entry, follow-up and exit, investors would make more informed decisions about the investment opportunities that abounded in credible private companies. (NAA)

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