The chief executive officer, FMDQ Group, Mr Bola Onadele, says that the global private equity asset under management (AUM) has hit $4.50 trillion in the last 10 years.
Onadele disclosed this at the Coronation Merchant Bank’s interactive session webinar with the theme: “Capital mobilisation through the private markets,” yesterday in Lagos.
In his keynote address at the webinar, Onadele said that part of these global funds were finding their way into Africa, especially Nigeria.
He, however, urged private companies in Nigeria to tap into the opportunities in the market for growth and development.
“As is the case in global private markets (PE) where private equity accounts for 60 per cent of total AUM, private markets in Africa and Nigeria are dominated by the PE segment,” he added.
Onadele, who was represented by the head, private capital, FMDQ Private Markets Ltd., Mr Yemi Osinubi, said that a recent survey showed that Nigeria ranks second in the attractiveness of African countries for PE investments over the last three years.
He said that healthcare and life sciences, technology and agribusiness were viewed as the most attractive sectors over the next three years.
He attributed the shift to private capital to the global liquidity crisis of 2008 and 2010, and noted that traditional sources of capital have become less available because of the tightening of the Basel two requirements for banks.
“Private equity AUM has gone up four times since 2002, since 2015 worth of private equity deal volume has exceeded equity deal volume,” he said.
Onadele said that institutional investors across the world were seeking alternative channels on their growing funds, especially in infrastructure funds.
Speaking on the drivers for PE, he added that raising capital in the public markets comes with high regulatory requirements and the cost of compliance for public companies is high.
“As such, many companies prefer to remain private for as long as possible and take advantage of the private capital market,” he said, adding that private markets give investors access to uncommon investment opportunities while providing diversification benefits.
He noted that the primary goal for the establishment of FMDQ Private Markets Ltd was to democratise the capital markets by promoting the inclusion of private companies and unleash the largely untapped pool of private capital in Nigeria.
Onadele disclosed that the platform had witnessed about N264 billion in notes since it was set up in 2020.
Earlier, managing director of Coronation Merchant Bank, Mr Banjo Adegbohungbe, said the interactive session was instituted to stimulate discourse and develop credible and workable solutions to common challenges.