Agusto & Co. Foresees Robust Growth in Managed Assets, to Surpass N10tn by 2025

Nume Ekeghe

Credit rating agency, Agusto & Co., has projected that managed assets in the country will witness an average annual growth rate of 32.4 per cent over the next two years.

The firm noted that while this represents a deceleration compared to the previous two years’ average growth rate of 45.8 per cent, the industry is still expected to see significant expansion, with managed assets surpassing the N10 trillion mark by 2025.

In its 2024 Asset Management Industry Report, it said the anticipated growth will be fuelled by several key factors, such as higher yields which are expected to attract more investments, while increased contributions from pension fund administrators and institutional clients will also play a crucial role. Additionally, it stated that the strategic allocation of funds in international money markets is being leveraged to counteract the effects of the depreciating local currency.

It stated, “In 2023, the Nigerian asset management industry demonstrated resilience through innovative financial products and effective asset diversification. Total assets under management (AUM) increased by 44 per cent to N5.9 trillion, driven by the growth of dollar-denominated portfolios and increased participation from retail and institutional investors.

“The industry’s offerings are divided into three segments: Collective Investment Schemes (CISs), Segregated Portfolios, and Alternatives. CISs, or mutual funds, pool clients’ funds for management. Segregated portfolios include privately managed discretionary and non-discretionary funds, along with other private collective investment schemes not listed on the SEC’s website. Alternatives encompass non-traditional assets such as REITs, private equity, and infrastructure funds.

“In 2023, segregated portfolios surpassed collective investment schemes, contributing 57 per cent of the industry’s AUM as investors shifted away from the more restrictive and conservative CISs, which accounted for 35 per cent. Alternative assets, including publicly-listed private equity, REITs, and infrastructure funds, made up 8% of managed assets.”

Agusto & Co. forecasts robust growth in the industry’s managed assets, projecting an average annual growth rate of 32.4 per cent over the next two years, albeit at a slower pace compared to the 45.8 per cent average for the previous two years.