Target Information

Verod, a leading private equity firm based in West Africa, has successfully exited its investment in Tangerine APT Pensions Limited, a prominent pensions fund administrator. The firm’s minority partner, APT Securities and Funds Limited, has acquired Verod’s stake in Tangerine APT Pensions. This transaction marks a significant milestone in the growth journey of Tangerine APT Pensions since its inception.

In 2020, Verod acquired 100% of AXA Mansard Pensions Limited and 45% of APT Pension Fund Managers Limited. The strategic merger of these two firms in 2021 resulted in the formation of Tangerine APT Pensions Limited, which initially held approximately ₦100 billion in Assets Under Management (AUM). Under Verod’s guidance, the company has remarkably grown its AUM to over ₦445 billion, demonstrating a substantial increase in its customer base and pension contributions.

Industry Overview in Nigeria

The pension fund administration industry in Nigeria has witnessed robust growth in recent years, driven by various factors including regulatory reforms and an increasing awareness of the importance of retirement savings among Nigerians. The introduction of the Contributory Pension Scheme in 2004 mandated formal sector employees to save a portion of their salaries, paving the way for increased assets in pension funds.

Furthermore, the Central Bank of Nigeria and the National Pension Commission have implemented policies aimed at enhancing the operational capacity and reach of pension fund administrators. This regulatory environment has encouraged healthy competition among pension fund managers, fostering innovation and improved service delivery.

Despite these advances, challenges remain. A significant portion of the population, particularly in the informal sector, is still not covered by pension schemes. This lack of inclusivity presents a notable gap in the market that presents opportunities for pension fund administrators to innovate and reach underserved demographics.

With a growing middle class and increasing life expectancy, the demand for retirement planning solutions is expected to rise, creating further opportunities for growth within the pension fund administration sector in Nigeria.

Rationale Behind the Deal

The exit from Tangerine APT Pensions aligns with Verod’s strategic objective to maximize returns for its investors. Over the course of its investment, Verod focused on enhancing operational efficiency and market positioning within the Nigerian pension industry, as evidenced by the impressive growth of AUM from ₦100 billion to ₦445 billion.

This transaction also reflects the successful collaboration between Verod and the leadership of Tangerine APT Pensions, which led to significant advancements in corporate governance, job creation, and the implementation of stringent environmental, social, and governance (ESG) standards.

About the Investor

Verod is recognized as a prominent investment firm in Africa, renowned for its commitment to impactful investing. Since its inception in 2008, the firm has successfully raised over $360 million and executed more than 40 investments across three funds. Verod's investment strategy is characterized by its proactive approach to identifying high-potential opportunities in various sectors.

In 2024, Verod achieved a significant accolade of becoming the first private equity fund globally to receive a Best-in-Class 2X Certification, underscoring its commitment to gender lens investing and its mission to leverage investment for transformative social impact.

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This exit appears to be a strategically sound decision for Verod, validating its investment approach focused on growth, optimization, and strategic partnerships. The substantial increase in AUM during Verod’s stewardship indicates a successful execution of its investment thesis and an enhanced capacity for generating high returns.

Furthermore, Verod’s focus on ESG principles not only contributed positively to the community but also positioned Tangerine APT Pensions as a leading player in the Nigerian market. The successful procurement strategies and impressive workforce diversity are additional indicators of the company’s positive impact on the local economy.

As the pension fund administration sector continues to evolve with increasing regulatory support and growing demand, Verod's exit enables them to realize their returns while leaving the company in the capable hands of APT Securities and Funds, which can leverage its expertise to drive further growth.

Overall, this transaction exemplifies a well-executed investment strategy, indicating that Verod made a commendable decision in its exit from Tangerine APT Pensions, setting a positive precedent for future investments in the sector.

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