The Nigeria Sovereign Investment Authority (NSIA), manager of Nigeria’s sovereign wealth funds, has made fewer, but more strategic investments in 2015, according to MD & CEO, Uche Orji.

“NSIA has invested in various private equity investment funds to tap into the high-growth sectors across Sub-Saharan Africa. These represent NSIA’s commitment to invest in alternative assets that offer superior performance and are less correlated to broader public equity market volatility,” said Orji.

The decision to invest in alternative assets proved beneficial in 2015 as this ensured that the Authority’s portfolio was relatively immune from the market forces while traditional asset classes suffered significant declines.

According to the audited financial results for 2015, total comprehensive income increased to N26.3bn, representing a 67% growth, whereas total assets recorded a growth of 20% to N213.66bn at year end.

“The 2015 fiscal year was characterized by high volatility and global market uncertainty. Currency turmoil, dwindling oil prices and decelerating growth across markets created a difficult investment environment for the Authority. Nonetheless, the overall results were positive,” said Orji.

Alternative assets mainly include hedge funds and private equity, both of which in aggregate have held up well during this period.

The Authority said that hedge funds produced on aggregate positive returns while private equity investments where generally flat, with secondary’s largely compensating for the j-curve effect of primary investments.

“Since private equity funds draw down capital over the course of several years and make investments that often last four years or longer, most cash flows are negative in the first few years after a commitment is made, causing the initial decline in the cumulative net cash flow curve,” NSIA said.

In 2015, NSIA has committed capital to AQR Capital Management, Africa Capital Alliance, Actis GP, Falko RAOF GP, Synergy Private Equity Fund and Verod Capital Management.

NSIA said that in 2016 it will maintain its strategy of a diversified portfolio to drive returns and mitigate market volatility.

The Nigeria Sovereign Investment Authority was set up to manage funds in excess of budgeted hydrocarbon revenues.

NSIA operates three mandate funds: the Stabilisation Fund, the Future Generations Fund and the Nigeria Infrastructure Fund.