PFAs recapitalisation: Four firms begin merger talks, GTCO acquires player

No fewer than four Pension Fund Administrators may go into merger and acquisition ahead of the April 2022 deadline stipulated for pension companies to raise their minimum capital from N1bn to N5bn, findings by the media have shown.

The National Pension Commission had in a circular last year directed PFAs to raise their shareholders’ fund, giving them a 12-month transition period.

The commission argued then that its oversight function had shown that the required minimum capital was no longer adequate to meet the operational expenses of the PFA business.

Earlier, the commission had raised the minimum capital of the PFAs from N150m in 2011 to N1bn in 2012.

The new capital base of N5bn has led many PFAs to consider merger and acquisition as the April 2022 deadline approaches.

Findings from the commission on Monday revealed that PenCom had granted a “no objection” approval to Guaranty Trust Holding Company to acquire 100 per cent shareholding of Investment One Pension Managers Limited.

Also, the commission was said to have also granted a “no objection” approval to FCMB Pensions Limited for the next phase of acquiring 60 per cent shareholding of AIICO Pension Managers Limited.

Meanwhile, AXA Mansard Pensions Limited has re-branded and changed its name to Tangerine Pensions Limited.

This followed the completion of the acquisition of 100 per cent shareholding of AXA Mansard Pensions Limited by Verod Capital Management Limited, it was learnt.

Verod Capital is reportedly backed by foreign and local institutional investors.

While the industry awaits PenCom to officially announce the names of the companies that have recapitalized so far, the Pension Funds Operators Association of Nigeria revealed that 11 companies had raised their capital to the required minimum.

There are currently 22 licensed PFAs in the country.

Reacting on the importance of the recapitalisation exercise, the Chief Executive Officer, PenOp, Oguche Agudah, said, “A well-capitalised industry will enable the sector to affect its various shareholders and the Nigerian economy in a positive way.”

He said PenOp had convened a summit focused on providing an avenue for decision makers and executives in the pension industry to engage with various advisers on strategies for raising additional capital.

The summit also analysed the outlook of the pension industry post recapitalisation.

He said the operators were urged to leverage the recapitalisation exercise as an opportunity to restrategise and reposition their operations to compete better in a more recapitalised and competitive industry.

“The goal for the association was to use the forum to answer some of the questions on the minds of its members and ensure they are well equipped for issues they may encounter as they work on different strategies towards meeting the recapitalisation requirement,” he said.

The 22 PFAs currently licensed to operate in the industry are: AIICO Pension Managers Limited, APT Pension Fund Managers Limited, ARM Pension Managers Limited, Crusader Sterling Pensions Limited, FCMB Pensions Limited, Fidelity Pension Managers, First Guarantee Pension Limited, IEI-Anchor Pension Managers Limited, Investment One Pension Managers Limited, Leadway Pensure PFA Limited, Nigerian University Pension Management Company, NLPC Pension Fund Administrators Limited, NPF Pensions Limited, OAK Pensions Limited, Pensions Alliance Limited, Radix Pension Managers Limited, Sigma Pensions Limited, Stanbic IBTC Pension Managers Limited, Tangerine Pensions Limited, Trustfund Pensions Limited, and Veritas Glanvills Pensions Limited.