Beyond the Carry Trade: In Search of Structural Alpha

For at least two decades, foreign and institutional investors with capital flowing into West African capital markets have followed one dominant playbook—buy high yielding government securities, wait to capture the interest rate differential and exit before currency depreciation erodes the interest rate gain. That known as the Carry Trade. It worked and slowly, it stopped working.

West Africa has recently experienced sweeping macroeconomic reforms, including Nigeria’s central bank unifying the exchange rate, Ghana’s fiscal consolidation led by the IMF, and the monetary tightening across Francophone West Africa. Analysts and economists alike believe that these were necessary corrections, but they have also fundamentally changed the terms of engagement for fixed-income arbitrageurs especially since 2022. Real yields were once attractive but are now being compressed by the twin pressures of sticky inflation and structurally weaker currencies. The “hot money” cycle that characterised the 2010’s; foreign capital rushing into Nigeria and Ghana for the interest rate and quickly exiting at the first sign of Naira or cedi distress is not just less profitable, but it is also a liability to the same economies that it depends on.

But government securities still retain a tactical role in any diversified allocation. However, they are a tool and are not a strategy. The conflation of the two has lost not only cost the economies they are in the opportunities for development, but the institutional investors the returns that are sitting in plain sight, in the structural core of the West African Economy.

The Alpha Macroeconomics Cannot Deliver

Sophisticated allocators in other frontier and emerging markets have internalised a concept within their investment thesis, but that has been missing in the West African investment narrative: Structural Alpha.

Structural Alpha is the returns generated by strategic investment in the sectors compelled to grow by structural necessity and not sentiment or guess work. It is a replacement of the returns gotten from bets made on exchange rate movements, or the anticipation of fiscal or monetary policy pivots. The Alpha is the outperformance available to investors that are able to identify companies and assets that will directly solve the regions most profound and irreversible deficits.

The West African region has a widely known macro story: an exploding population exceeding 400 million people across the region, a median age below 20 and rapid opportunities for urbanisation. But these are the headlines and headlines do not generate returns, execution does. Structural Alpha is found in identifying the specific assets and at the right position in the value chain that will monetise the growth with discipline and durability, and not in knowing that the population of West Africa is growing—every investor, institutional or otherwise knows this.

The distinction between macro and micro is important. By macro, we mean the top to bottom economic and demographic conditions that shape West Africa’s investment backdrop and rationale, while by micro we mean the deal-specific structuring, operational execution and the local market dynamics that determine the deliverability of specific investment decisions. Consequently, investors that buy broad-based West African funds on the strength of demographics are making a different bet compared to investors backing specific facilities or technologies. The first investors are often making a worse bet through a thesis over the second investor funding businesses that are solving specific infrastructural problems for the region, such as agri-processing in Kaduna or solar-powered cold storage solving post-harvest loss in rural Ghana

Three Pillars of Structural Necessity

The first pillar is rooted in West Africa’s infrastructure deficit that is estimated in the hundreds of billions of dollars and the energy transition. These are not necessarily problems waiting for resolution, but they present an opportunity awaiting the right capital. Novel systems like decentralised energy systems, off-grid renewables and multimodal logistics assets go beyond being inflation resistant, they also generate recurring and contracted cashflow in currencies that are indexed to hard commodity prices or are dollar linked. For patient institutional investors, these are the promises of government securities but have faltered to deliver in real terms.

The second pillar is tied to purpose built real estate and urban development. West Africa’s real estate story is still told through the lens of luxury residential property in Lagos Island or Accra’s Airport residential. But that is a rather immature story, and the next chapter will be in student housing, industrial warehousing and data centres that will be servicing the expanding global digital economy. These are the assets that have structural demand drivers and while they do not require an optimistic economic forecast, they demand an accurate reading of how people live and work.

The third pillar is in agri-processing and import substitution. In a region that, according to the African Development Bank (AfDB), sees its annual food import bill surging toward $110 billion and this bill is predominantly driven by commodities like wheat, rice, refined sugar, and vegetable oils we are climatically positioned to produce, domestic manufacturing and agribusinesses are not just commercial opportunities. They are national security imperatives that must attract regulatory support and concessionary financing. The alpha here is in the middle of the value chain, in storage, processing and distribution infrastructure where there’s a fragmentation that creates persistent pricing inefficiencies that a well-capitalised and operationally rigorous investor can systematically build on.

The Policy Risk That Must Be Named

Any candid assessment of Structural Alpha will demand intellectual honesty on one material risk: policy execution. There is no investment thesis that exists in a vacuum. Structural Alpha is not an exception. Its framework depends on a working assumption that is far from guaranteed which is – the macroeconomic and regulatory reforms sweeping through the West African region will continue to deepen and most importantly, hold.

But they may not. West Africa’s reform trajectory has never been linear. Experienced allocators know better than to mistake a promising cycle for a permanent condition. Nigeria alone is a strong indicator of this. We have seen with uncomfortable regularity that policy reversals don’t need catastrophe to materialise. Political pressure, an election cycle or even a slight commodity shock that makes fiscal discipline inconvenient can lead to policy reversal. The unification of the naira in 2023 was a bold stand, but it was also, to many observers overdue by a decade. That lag itself is a datapoint worth sitting with.

Regulatory uncertainty, land tenure ambiguities and the perennial spectre of fiscal populism are features of the landscape and not just tail risks in West Africa. The cautious institutional reader would be right to press on this point. But the appropriate response is not to dismiss or attempt to diminish the risk. Instead, it is to price is correctly and invest in a manner that does not depend on lofty assumptions of flawless reform execution. Assets with hard collateral, contracted revenues and exposure to sectors with political support, such as food, security, power and housing tend to carry an implicit hedge against policy volatility. Consequently, it’s important to include in the framework that structure is as important as sector allocation.

The Moat of Local Intelligence

Structural Alpha in West Africa has remained uncaptured by global capital mostly because it has qualitative data points unavailable in a Bloomberg terminal. Institutional memory like deep regulatory relationships, an understanding of government procurement and the ability to conduct rigorous on-the-ground due diligence in markets with unreliable and scare public information are not tangible for “data backed” decision making in the investment process. This is where the distinction between volatility and risk is operationally significant. Volatility is a pricing phenomenon; it is the mark to market fluctuations that cause anxiety in portfolios. Risk is the potential for the permanent loss of capital. Consequently, a logistics asset in Lagos may reprice in a difficult quarter, but when fundamentals are solid, that reprice is just noise. Patient capital that understands this distinction will consistently outperform capital that does not.

The Decade Ahead

The carry trade was a rational response to the market conditions of its time. Those conditions are changing and the next decade of wealth creation in West Africa will belong to those who will build the cold chains, the data centres, the processing plants and the power grids that West Africa’s young and urbanising population will require, and not those that just lend money to governments at high interest rates.

The investors who will align their capital with the structural solutions West Africa desperately needs will not only generate superior returns but will architect the region’s economic future and that is ultimately the definition of patient and productive capital.

Mounir Bouba: Executive Director at ARM Investment Managers.

Source: BusinessDay

ARM-Harith Achieves US$76 Million First Close for its Climate Transition Fund – Africa’s first integrated multi-currency blended finance vehicle for infrastructure equity

ARM-Harith Infrastructure Investments Limited (“ARM-Harith”), a leading pan-African private equity fund manager focused on sustainable energy and infrastructure investment, has announced the first close of its Successor Fund, a climate transition Fund (the “Fund”) at ~US$76 million equivalent.

The Fund is the first integrated multi-currency blended finance platform purpose-built for African institutional investors, denominated in both US dollars and local currency within a single structure for investment into infrastructure equity. Targeting US$200 million at final close, it is designed to unlock African institutional capital at scale and accelerate investment in energy transition and climate resilient infrastructure across Sub-Saharan Africa.

This structural innovation directly addresses one of the most persistent barriers to African infrastructure investment: the mismatch between hard currency fund structures and the local currency revenues generated by the assets they finance. By integrating a more dynamic currency profile from the outset, the Fund mitigates currency risk at project level and enables greater domestic institutional investors’ participation, particularly pension funds on terms aligned with their own balance sheets and regulatory frameworks, while international and other investors with access to hard currency retain US dollar exposure.

The first close is anchored by a combined US$20 million of catalytic capital from FSD Africa Investments (FSDAi) and the African Development Bank (AfDB) through its Sustainable Energy Fund for Africa (SEFA). This capital is designed to de-risk participation by domestic pension funds and other institutional investors across the continent, supporting the broader ambition of scaling local capital mobilisation for African infrastructure.

The Fund will be deployed into essential infrastructure projects that deliver real-economy impact and resilient cashflows across climate-resilient assets in Sub-Saharan Africa.

Speaking on the milestone, Rachel More-Oshodi, Chief Executive Officer of ARM-Harith, said:

“This first close is both an achievement and an inflection point for ARM-Harith. With our first fund, we demonstrated that domestic institutional capital can be mobilized into infrastructure equity. With this successor fund, we are building on that foundation by bringing local and hard-currency capital together within a single platform — better aligning the structure of the capital with the realities of African infrastructure assets. This is a fundamental redesign: one that recognizes local market realities, mobilizes domestic savings, attracts international capital, and allocates risk more intelligently. The institutions that are backing us understand the significance of this shift. They are not only investing in a fund; they are helping to shape a more practical, scalable way to finance the infrastructure Africa needs.”

Joao Duarte Cunha, Manager of AfDB’s Renewable Energy Funds Division, stated, “The successful first close of the ARM-Harith Successor Fund marks a major milestone for renewable energy investment in sub-Saharan Africa. SEFA’s catalytic participation demonstrates the African Development Bank’s commitment to unlocking long-term institutional capital and shows how blended finance can mobilise private investment into sustainable infrastructure.”

On bridging the gap between pension capital and infrastructure equity, Anne-Marie Chidzero, Chief Investment Officer at FSDAi said: “The constraint has never been capital itself, but the absence of investment products structured to meet pension funds’ liability-matching needs, particularly around tenure, risk allocation, and currency alignment. Our investment structure was designed to bridge that gap – enabling pension funds to participate in infrastructure equity while remaining fully aligned with their investment objectives and obligations.”

Through its predecessor fund, ARM-Harith financed critical transport infrastructure and over 700 MW of installed power capacity, enabling approximately 22,500 jobs and avoiding an estimated 2.6 million tonnes of CO₂ emissions annually. The Successor Fund will build on this momentum, targeting projects that deliver strong commercial performance with measurable climate and development impact, contributing to regional integration and sustainable development across the continent.

About ARM-Harith Infrastructure Investments Limited

ARM-Harith Infrastructure Investments Limited is a leading African infrastructure fund manager with over 80 years of combined investment experience across the continent. The firm specializes in equity investment across energy, transport and logistics, digital, waste and water infrastructure, with a strong focus on sustainability, operational excellence, and long-term value creation. ARM-Harith has been at the forefront of successful mobilization of domestic institutional capital, particularly Nigerian pension funds, into African infrastructure equity for over a decade, and its portfolio has included landmark transactions in power generation and transport.

Website: https://armharith.com/ 

For media enquiries and investor relations, please contact: ARM-Harith Infrastructure Investment Limited [email protected]

This announcement is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The ARM-Harith Successor Fund remains strictly restricted to “Qualified Investors” as defined under the Rules and Regulations of the Securities and Exchange Commission (SEC), Nigeria and the Financial Services Commission (FSC), Mauritius. Prospective investors must meet the suitability criteria established by the SEC or the FSC, and investment remains subject to the terms and conditions outlined in the Fund’s authorised transaction documents.

DAAYTA 2026: Qiqi Farms Global Ltd Emerges Winner

The 11th anniversary edition of the Deji Alli ARM Young Talent Award (DAAYTA) concluded with a distinguished celebration of Nigeria’s entrepreneurial prowess. Favour Okikijesu Adeleke, founder of Qiqi Farms Global Ltd, was officially awarded the title of winner for DAAYTA 2026 during a virtual ceremony held on April 17, 2026. This prestigious edition successfully convened a dynamic cohort of young entrepreneurs dedicated to addressing Nigeria’s critical challenges across agritech/agribusiness, technology, energy, and green transportation sector.

Qiqi Farms Global Ltd impressively stood out during the selection process by emphasising sustainability. QiQi Farms is a technology-driven agritech and food distribution company transforming Africa’s food systems by connecting over 2,000 smallholder farmers to premium local and international markets. Over the past three years, the company has supplied 396 metric tons of fresh produce to more than 50 hospitality businesses across Nigeria, Europe, and North America, leveraging cold chain infrastructure to ensure traceability, reduce post-harvest losses by up to 50%, and guarantee farmer payments within 24–48 hours, while driving sustainable rural economic growth through globally aligned best practices.

The finalists of DAAYTA 2026 represent the immense potential of Nigeria’s youth-led innovation in diverse sectors:

  • Hadi Finance – Unlocking inventory financing for small and medium-sized retailers.
  • Midddleman – Enabling secure cross-border trade with trusted procurement, payments, and logistics from China.
  • TFS Cargo Bicycles – Building affordable electric cargo mobility solutions for underserved communities.
  • Asoro Automotive – Driving smarter mobility with AI-powered vehicle diagnostics and fleet management.
  • Venth Ventures Limited – Pioneering sustainable food products and biodegradable alternatives to single-use plastics.
  • Genesis360 – Simplifying food financing for individuals and businesses across Africa.

In celebrating the 11th anniversary of DAAYTA, Wale Odutola, CEO of ARM, extended his congratulations to Favour Okikijesu Adeleke and all of the finalists for their remarkable solutions, which held the promise of making a lasting impact. He reaffirmed ARM’s commitment to fostering the next generation of entrepreneurs, whose innovations are poised to shape the future landscape of Nigeria.

The DAAYTA program transcends the notion of a mere award; it epitomizes ARM’s vision to cultivate a vibrant entrepreneurial ecosystem. This year’s event, a significant milestone in the program’s evolution, further highlights the vital role of collaboration and innovation in driving transformative change. As the program continues to evolve, it serves as a powerful catalyst for showcasing the potential of Nigeria’s emerging leaders and the vast opportunities that await in the future.

About ARM

Founded in 1994, Asset & Resource Management Holding Company Limited (ARM) is one of Nigeria’s leading non-bank financial institutions. With a legacy of innovation and trust, ARM offers a broad range of asset management and investment solutions for individuals, corporates, and institutions.

Navigating Volatility: The Case for Nigerian Equities in Q2 2026

Navigating Volatility: The Case for Nigerian Equities in Q2 2026.

Midway through Q2 2026, Nigerian investors are confronting a familiar cocktail. Inflation ticked up to 15.38% in March, ending an eleven-month disinflation streak. The naira has stabilized within a managed range, but reserves have eased back from their February peak. The central bank meets again on 19 and 20 May. The instinct, after a 56% year-to-date rally on the Nigerian Exchange, is to take profits, retreat into T-Bills, and wait for something to feel safer. This instinct is understandable and deeply human.

But nothing will change while you wait, and waiting itself will cost you.

The Illusion of Safety

Fixed-income instruments are not a true shelter from inflation. They are, at best, a slower way of holding ground. The 364-day Treasury Bill currently yields 16.15% against headline inflation of 15.38%, leaving a real yield of roughly 77 basis points. On paper, that is positive. In practice, when you account for naira-dollar pressure, reinvestment risk, and the opportunity cost of capital, the buffer is thin. Every naira parked at this level is, at best, preserved. It is not compounding wealth at the rate this market is otherwise creating it.

Volatility, by contrast, is not the enemy of returns. It is the mechanism by which returns are generated. Price dislocations, the kind we are still seeing across pockets of the Nigerian Exchange even within an overall bull tape, are precisely what create the conditions for intelligent investors to acquire quality assets at sensible valuations. The market is not a warning to leave. It is an invitation to look harder.

Where the Value Lives

Not all sectors are navigating this environment equally. Four areas warrant particular spotlight.

Nigerian Tier-1 banks are positioned more favorably than the noise suggests. The CBN’s recapitalization exercise concluded successfully in March, removing an overhang that weighed on sentiment for most of last year. The FY2025 dividend season has confirmed which institutions translated higher rates into shareholder returns. GTCO declared a total dividend of ₦12.76 per share for 2025, a 58.9% increase year-on-year, which equates to a yield of approximately 9.2% at current prices. Zenith Bank declared ₦10.00 per share, a 100% increase, equating to about 7.7%. The split with peers that took heavier forbearance provisions is real and worth understanding, but for the names that delivered, dividend support of this scale alongside continued capital appreciation potential is genuinely attractive. These are not positions to exit. They are positions to consider building.

Industrial Goods have been a standout story of 2026, with the index effectively doubling year-to-date on the back of infrastructure demand and pricing discipline among the cement majors. Dangote Cement, which recently declared a ₦45.00 per share dividend, and BUA Cement, which proposed ₦10.00, illustrate the income case alongside capital appreciation. The sector has run hard, so entry discipline matters more than it did at the start of the year.

Then there is telecoms and digital infrastructure. Nigeria’s transition to a digital economy is not a trend subject to macroeconomic cycles. It is structural, and it is accelerating. This sector offers something rare in volatile periods: defensive characteristics with embedded growth. That combination is difficult to find anywhere else on the board.

Rebalance, Don’t React

The greater risk in this market is not volatility. It is FOMO. With the All-Share Index up 56% year-to-date, the gravitational pull is toward chasing names that have already run hard, doubling down on what worked in Q1, and treating every new high as an entry point. That is how investors give back gains.

Market breadth has actually been broadly healthy. On most recent sessions, advancers have outnumbered decliners. What the market is, instead, is rotational. On 5 May, the index fell ₦904 billion in a single session yet 46 stocks rose against 26 that fell. That is not panic selling. That is institutional money reallocating from names that have run into names with more room. The investors who participate intelligently in that rotation will compound. The investors who chase the prior leaders will pay for it.

The discipline that matters in the rest of Q2 is therefore not about staying out of the market. It is about three habits. Rebalance regularly: if a position has appreciated to where it now dominates your portfolio, trim it and redeploy. Resist FOMO: the names making headlines today are the ones that already moved. So, enter carefully. Manage risk explicitly: position sizing, sector concentration limits, and an honest view of how much volatility you can absorb without panic-selling matter more than any single stock pick. This is where active, research-driven management earns its place in a portfolio.

Staying the Course

Volatility is not a malfunction of emerging markets. It is a feature of them, one that rewards patience and penalizes panic in roughly equal measure. The investors who will look back on Q2 2026 with satisfaction are not those who waited for certainty. Certainty follows returns.

Carefully review your portfolio. Resist emotional repositioning. And ensure that whoever is navigating this market on your behalf has a framework, not just a feeling.

Originally published on The Cable

ARM Africa Trade Finance Fund CEO Speaks on Financing Africa’s Development at GTR West Africa 2026

On behalf of ARM, George Wilson, CEO of ARM Africa Trade Finance Fund, participated in a panel discussion at the Global Trade Review (GTR) West Africa 2026 in Lagos, focused on “Trade finance assets, African financial institutions, and domestic capital: Funding the next phase of Africa’s development.”

The session brought together industry leaders to examine how Africa can better mobilise its own capital to drive sustainable, trade-led growth. As liquidity constraints continue to shape global markets, the role of trade finance as an alternative asset class is becoming increasingly critical—not only in unlocking institutional capital, but in supporting real sector growth across the continent.

George highlighted the importance of deepening local capital pools, strengthening collaboration between financial institutions, and deploying innovative fund structures that can effectively channel capital into trade. He also emphasised the opportunity to leverage regulatory frameworks, such as pension fund reforms, to unlock domestic liquidity at scale.

At ARM, this work is central to our broader commitment to developing investment solutions that bridge capital gaps, support businesses, and drive long-term economic growth. Through platforms such as the ARM Africa Trade Finance Fund, we continue to play an active role in structuring and deploying capital into sectors that are critical to Africa’s development.

As conversations evolve into action, the focus remains clear: building resilient financial ecosystems, mobilising domestic and international capital, and enabling trade as a key engine for growth across Africa.

Our governance strength is independently validated by dual AA credit ratings from Agusto & Co. and GCR Ratings, a powerful testament to our financial soundness and commitment to investor protection – Orga

Kai Orga, Managing Director of ARM investment Managers, in this interview with BusinessDay, breaks down the transition of mutual funds from a niche financial product to the cornestone of Nigerian wealth creation, and how ARM is navigating a high-interest-rate environment to deliver value, amongst others. Excerpts:

In an era of persistent double-digit inflation, how has ARM adapted its fund management strategy to ensure that mutual funds move from being mere “savings buffers” to genuine wealth-creation tools for Nigerians?

Inflation has tested every Nigerian household, underscoring the importance of preserving capital and extracting more value from every naira invested. That’s where expertise matters. At ARM Investment Managers, we treat volatility as a source of opportunity, not paralysis deploying a coordinated investment process that actively seeks mispriced value across asset classes.

Our strategy is anchored in disciplined active management: knowing what to buy or sell, when to act, and how much exposure to take relative to clearly defined benchmarks. We continuously test our views against macroeconomic conditions and market dynamics, refining allocations to keep performance competitive through cycles.

Crucially, we offer a suite of products calibrated to different risk profiles and objectives and we manage each fund strictly to its stated policy. That consistency and transparency enable us to shift mutual funds from mere inflation buffers to durable engines of wealth creation.

Mutual funds are often cited as the “premier wealth vehicle” because of their accessibility. What specific barriers, technological or psychological, has ARM broken down to bring institutional-grade investing to the everyday Nigerian?

We started by breaking the communication barrier, replacing jargon with plain language so people understand both benefits and risks. Through structured content, webinars, digital tools and how‑to videos, we’ve raised product literacy, helping investors grasp not just what to buy, but why.

We then lowered the cost of entry. Institutional‑grade access no longer requires institutional capital. With minimums from ₦1,000 on funds like the ARM Money Market Fund, Nigerians can start small and build consistently, without compromising professional management. We’ve also opened doors to high‑grade fixed income previously inaccessible to lower‑ticket investors, advancing financial inclusion in practice, not just policy.

On the technology front, ARM One, our flagship mobile platform on Android and iOS, brings the entire investing journey online: account opening, fund purchases, portfolio tracking, performance insights, and redemptions. Whether you are a market trader in Onitsha or a young professional in Port Harcourt, you now have the same seamless access to ARM’s investment expertise as an asset management company in Lagos.

To address Nigeria’s trust deficit, all ARM mutual funds are SEC-registered, independently custodied, and trustee-supervised. We publish performance transparently, pay dividends promptly, and deliver electronic statements to every unitholder. Our governance strength is independently validated by dual AA credit ratings from Agusto & Co. and GCR Ratings, a powerful testament to our financial soundness and commitment to investor protection.

Finally, we invest in education and community. Through the Realising Ambitions blog, in‑app insights, social content, partnerships, webinars, and CSR Initiatives, we promote financial literacy and demystify diversification, compounding, and asset allocation. Programs like Refer & Earn harness social proof, as people invest more confidently when someone they trust has had a positive experience.

Our product range now mirrors institutional choice: the ARM Money Market Fund (low risk, high liquidity), ARM Fixed Income Fund (steady medium‑term growth), ARM Discovery Balanced Fund (equity‑driven appreciation), ARM Halal Balanced Fund (Shariah‑compliant), and the ARM Eurobond Fund (dollar protection). What was once exclusive is now everyday accessible.

Bottom line: We have broken three barriers, financial (low minimums), technological (mobile access), and psychological (regulation, transparency, education), so more Nigerians can invest with confidence

3. What investment strategies and asset-allocation decisions enable ARM to move beyond capital preservation and consistently deliver inflation-adjusted growth?

We practice active portfolio management within robust regulatory and internal policies, giving us the flexibility to respond to market shifts without losing discipline. Asset‑allocation decisions reflect our macroeconomic outlook, fund guidelines, risk profiles, and return objectives. Our aim isn’t just to beat inflation, it’s to deliver attractive risk‑adjusted returns consistently. That principle sits at the heart of every allocation we make.

Given the volatility of the Naira and the fluctuating yields on Treasury Bills, how is ARM currently balancing its portfolios to outperform the “inflationary floor” without over-exposing retail investors to risk?

Given the volatility of the Naira and the frequent repricing across the fixed income curve, generating sustainable real returns has become structurally more challenging. Persistently high inflation and pronounced currency pass-through effects have further raised the hurdle, making consistently positive real returns, particularly within traditional fixed income assets, more difficult to achieve.

Against this backdrop, our objective remains clear: to deliver positive, risk-adjusted real returns that preserve purchasing power while avoiding undue volatility for retail investors. We pursue this through a combination of strategic asset allocation and disciplined tactical positioning across public markets and, where mandates permit, selective exposure to alternative asset classes that can enhance diversification and improve the resilience of real returns.

However, in an environment where inflationary risks remain elevated, we recognize that fixed income exposures alone may struggle to consistently outperform the inflationary floor. Accordingly, where investment mandates permit, allocations are increased to equities, with a focus on fundamentally resilient bellwether stocks that exhibit strong earnings visibility and pricing power.

Beyond public markets, alternative asset classes are incorporated where appropriate, including real assets and other inflation-hedging strategies, to enhance diversification and strengthen the durability of real returns.

In essence, we remain highly conscious of the need to develop innovative, well-diversified portfolio solutions that can deliver resilient real returns for our clients, while prudently managing downside deviations and preserving capital across market cycles.

In the Nigerian market, trust is a currency as valuable as the Naira. How has the regulatory evolution of the SEC and the transparency of the mutual fund structure helped win over investors who were previously skeptical of formal financial markets?

The SEC has tightened the system where it matters most: governance, licensing, disclosures, and periodic reporting. In Collective Investment Schemes, assets must be held by independent custodians with trustee oversight, enforcing true separation of duties and adherence to the trust deed. This architecture adds visible checks and balances.

The Commission has also broadened market access, supporting product innovation, investor education and digital distribution, helping demystify investing for the retail segment. In an environment where governance gaps once eroded confidence, a stronger regulatory framework has been pivotal to restoring trust and encouraging long‑term participation.

We have seen a surge in interest in Money Market Funds and Dollar-Denominated Funds. Do you see this as a temporary hedge against current economic headwinds, or a permanent shift in how Nigerians view portfolio diversification?

Both are responses to today and a reset for tomorrow. Money Market Funds deliver higher yields than savings accounts with daily liquidity, making them a practical alternative for everyday cash management. Dollar‑denominated funds address currency risk, offering naira depreciation protection, a hedge against imported inflation, and access to Eurobond yields that can be compelling in hard currency terms.

While the surge reflected marcro headwinds, it also reveals a structural evolution: investors are embracing multi‑currency, multi‑asset planning. As financial literacy and digital access deepen, these products will not just be safe harbors; they will remain core building blocks of retail portfolios.

With the rise of “Invest-tech,” how has ARM integrated digital platforms to transition from a traditional asset manager to a fintech-driven powerhouse? Has this lowered the cost of entry for the average investor?

We’ve built proprietary digital rails and forged strategic partnerships. The ARM One app is a unified, mobile‑first hub for onboarding, accessing all ARM mutual funds, trading securities, tracking real‑time performance, receiving tailored insights, and executing transactions securely.

Partnerships with leading fintech platforms extend our distribution nationwide, so investors can access institutional‑grade funds in a few taps, with low minimums starting from ₦1,000, no branch visits, and no paperwork.

Has the cost of entry fallen? Unequivocally, yes. Digital onboarding, micro‑ticket investing, and automated contributions have removed the friction and cost that once kept people out. What used to require a physical office now needs only a smartphone and data.

Beyond individual wealth, how is the collective pooling of capital in ARM’s mutual funds currently supporting Nigeria’s broader economic infrastructure and corporate growth?

Beyond individual wealth creation, the collective pooling of capital in ARM’s mutual funds plays a meaningful role in Nigeria’s broader economic development. A key example is the MOFI Real Estate Investment Fund (MREIF), which mobilizes long-term capital to finance residential mortgages at single-digit interest rates, well below prevailing market levels. This directly improves housing affordability, deepens the mortgage market, and supports growth across Nigeria’s real estate and construction value chain.

In fixed income, our funds also provide steady liquidity to government and quasi-government securities, helping finance critical infrastructure in housing, power, and transport.

On the corporate side, ARM’s equity and balanced funds channel patient capital to well-governed Nigerian companies, supporting expansion, strengthening balance sheets, enabling job creation, and enhancing market discipline through active price discovery and engagement.

Looking forward, what key macroeconomic, regulatory, and demographic trends will shape the next phase of mutual fund growth in Nigeria, and how is ARM positioning itself to lead that evolution? Will we see more specialized funds (like ESG or Infrastructure-focused retail funds) becoming mainstream?

Macro: A moderation in inflation and a shift by the CBN toward monetary normalization would stabilize real yields, setting the stage for longer‑duration fixed income, balanced funds, and specialized strategies. Continued FX reforms and transparency will be critical to restore confidence, revive foreign portfolio flows, and broaden global diversification.

Regulation: The SEC’s openness to product innovation should spur growth in ETFs, REITs, Shariah‑compliant funds, thematic vehicles and alternative, with governance, ESG integration, and investor suitability separating the seasoned managers from the rest.

Demographics: Nigeria’s millennial cohort is moving into higher‑earning years, creating demand for goal‑based solutions, from home ownership and education trusts to multi‑fund wealth plans. These investors value professional management, diversification, and downside protection, and are comfortable assembling portfolios across several funds to meet life goals.

Specialization is already moving mainstream. When framed locally, ESG and ethical investing resonate; infrastructure, private credit, and real assets are attractive for stable income and inflation hedging. ARM has been proactive: our MREIF expands access to affordable mortgages, tackling a critical structural need. Our private Debt fund open differentiated yield opportunities, and our deepening focus on alternatives enhances diversification and long‑term value creation.

Originally published on BusinessDay

ARM Launches ₦200 Billion Private Debt Fund to Expand Access to Long-Term Capital for Nigerian Businesses

ARM Launches ₦200 Billion Private Debt Fund to Expand Access to Long

ARM Investment Managers has officially launched the ARM Private Debt Fund, a ₦200 billion private credit programme designed to expand access to structured, long-term financing for scalable Nigerian businesses while offering institutional investors a stable and diversified source of income.

The Fund was formally introduced to the market at a media briefing held in Lagos on Monday, January 12, 2025. The session brought together members of the business and financial press to discuss the growing importance of private credit in Nigeria’s capital markets and its role in addressing long-standing financing gaps faced by small and medium-sized enterprises.

The ARM Private Debt Fund is structured as a closed-ended private credit vehicle and is focused on providing non-bank financing to businesses with strong operating fundamentals and predictable cash flows. The Fund will deploy capital primarily through senior secured term loans and revolving credit facilities, alongside selective subordinated debt where appropriate. Series I of the programme is targeting an initial raise of ₦25 billion under a broader ₦200 billion shelf programme.

Nigeria’s SMEs remain a critical driver of economic activity, contributing a significant share of GDP and employment across the country. Despite this importance, many viable businesses continue to struggle to access long-term financing that aligns with their growth cycles. Traditional banks, constrained by regulatory requirements, funding costs, and balance sheet considerations, often prioritise short-term lending or sovereign exposures. This dynamic has created a structural financing gap that private credit is well positioned to fill.

Private credit provides an alternative source of capital by allowing professional investment managers to lend directly to businesses using flexible, cash-flow-aligned structures. Unlike conventional bank loans, private credit facilities are designed to match the operational realities of businesses, offering longer tenors and tailored repayment terms while maintaining strong legal and risk controls. For growing enterprises, this form of financing can support expansion, asset acquisition, working capital optimisation, and long-term competitiveness.

Speaking at the launch, Deji Opeola, Chief Executive Officer of the ARM Private Debt Fund, described the initiative as a deliberate response to Nigeria’s evolving financing needs.

According to him, the Fund has been structured to provide patient and well-designed capital to businesses while maintaining a strong focus on capital preservation and risk management for investors. He noted that disciplined credit underwriting, asset-backed lending, and active portfolio monitoring are central to the Fund’s investment approach.

From an investor perspective, the ARM Private Debt Fund is targeted at qualified institutional investors, development finance institutions, family offices, and high-net-worth individuals seeking portfolio diversification through private credit. The Fund is expected to deliver returns of approximately 300 basis points above the Federal Government of Nigeria 10-year bond yield, subject to market conditions. Returns are driven primarily by interest income rather than market price movements, offering investors exposure to a less volatile asset class relative to public equities and bonds.

Strong governance is a core pillar of the Fund’s design. Investment decisions are overseen by independent governance structures, including an Investment Committee and an Advisory Board, supported by strict concentration limits, conservative leverage, and continuous portfolio oversight. This framework is intended to ensure consistency, transparency, and disciplined risk management throughout the life of the Fund.

Beyond investors, the launch of the ARM Private Debt Fund also represents an opportunity for eligible SMEs and mid-sized businesses seeking growth capital. The Fund is open to businesses with proven operating histories, sound governance structures, and clear plans for the use of funds. Financing is targeted at companies looking to expand operations, strengthen working capital, acquire productive assets, or optimise their balance sheets. Priority sectors include manufacturing, trade and distribution, agribusiness value chains excluding primary agriculture, logistics, services, and technology-enabled businesses.

The Fund forms part of ARM’s broader alternatives investment platform, which spans infrastructure, real estate, trade finance, and sector-focused strategies. Domiciled in Mauritius and structured as a multi-currency vehicle, the ARM Private Debt Fund is designed to deploy both naira and hard-currency capital. While the initial focus is Nigeria, the platform has been structured to support expansion into other Sub-Saharan African markets over time.

Commenting on the strategic significance of the Fund, Wale Odutola, Group Chief Executive Officer of ARM, described the launch as the foundation of a long-term private credit platform for the Group. He noted that the objective is to support sustainable business growth while contributing to the development of a deeper and more resilient private credit market in Nigeria.

With the launch of the ARM Private Debt Fund, ARM is positioning itself at the forefront of private credit investing in Nigeria. By connecting long-term capital with productive enterprise, the Fund aims to support business growth, job creation, and economic resilience while delivering consistent, risk-adjusted returns to investors.

Buy Your Dream Home: MREIF Introduces Lower Interest Rates for Nigerians

LAGOS, NIGERIA — The Ministry of Finance Incorporated Real Estate Investment Fund (MREIF), a key driver of affordable homeownership in Nigeria has announced a major reduction in its mortgage requirements. The interest rate has now been reduced from a fixed rate of 12% per annum to 9.75% per annum.

The revised terms for the fund scheme, managed by ARM Investment Managers, is designed to address the financial constraints faced by many aspiring homeowners. By significantly lowering the entry barrier, MREIF and its group of financial partners are fostering a more inclusive and accessible housing market.

Commenting on the development, Mr. Wale Odutola, the Group CEO of ARM, stated, “Our role as fund managers is to ensure MREIF operates as a credible vehicle for lasting impact. The reduction in the down payment, alongside the competitive interest rate, is a strategic move to empower more Nigerians. This is a testament to the power of a public-private partnership that is genuinely focused on delivering tangible solutions and contributing meaningfully to Nigeria’s economic progress.”

The new terms are expected to accelerate the transition from renting to owning, providing financial stability and long-term security for countless Nigerian families.

It is important to note that the downpayment for the selected property can also be funded from the pension accounts (RSA) of willing beneficiaries, further reducing all barriers to participation in the scheme.

To learn more about this groundbreaking scheme, visit: https://www.arm.com.ng/mreif-about-mreif/