Private equity: FBNQuest Funds invests over N20bn in 70 firms

FBNQuest Funds, the merchant banking and asset management arm of FBN Holdings Plc, on Wednesday said that it had invested over N20 billion in private equity since 2003.

The company’s Vice President, Alternative Investments, Mr Christian Ekpo, disclosed this at a virtual FBNQuest engagement session organised to provide some industry insights into its business.

Incorporated in 2003, FBNQuest Funds is an alternative investments platform of FBNQuest.

The company is one of the oldest private equity firms in Nigeria originally created to manage a pool of funds set aside by FirstBank for SME investment.

Ekpo said that the private equity firm had invested over N20 billion in roughly 70 companies and assets across portfolios since inception in 2003.

“Since our inception in 2003, we have deployed in excess of N20 billion in over 70 companies and assets across various portfolios.

“We partner with our portfolio companies in delivering growth, capital and providing value creation support through revenue enhancement, margin improvements and capital efficiency.

“Our asset mix is comprised of investments in real estate, direct private equity investments, venture capital funds and third party managed equity.

“The asset mix gives us exposure to high growth sectors like real estate, hospitality, leasing, technology and consumer business,” Ekpo added.

On the outlook of the equities market for H2 2020, Mr Tunde Abidoye, FBNQuest Head Equity Research, said the fragility still exists.

Abidoye observed that companies and entities were still vulnerable to any macro shock in the environment.

“Banks have structured about 40 per cent of loan books but the possibility of these loans still existing is there despite forbearance packages,” he said.

He urged investors to stake their funds in blue chip companies that would withstand macro economic shocks.

Abidoye said the most pressing challenges for banks were asset quality and rise in cost risk.

According to him, banks have to contend with downward pressure, following the subdued interest rate environment and regulatory fee cuts on e-banking transactions.

“Banks have to contend with downward pressure on non interest margin following the subdued interest rate environment and regulatory induced fee cuts on e-banking transactions,” he said.

Speaking on an overview of the Nigerian economy, Ms Chinwe Egwim, Senior Economist FBNQuest, said COVID-19 had presented the Federal Government with the opportunity to deliver in part on its mandate on fuel price deregulation and completion of core infrastructure projects.

Egwim said: “Nigeria will have a recession in 2020 and a weak recovery next year.”