SIM Capital Alliance floats IPO for N5bn value fund




The unit trust segment of the Nigerian capital market is set to be boosted by SIM Capital Alliance Limited (SimCap), a joint venture between Capital Alliance and Sanlam Investment Management Limited.


Specifically, SIM Capital Alliance Limited has concluded arrangements to float a N5 billion SIM Capital Alliance Value Fund by issuing 50 million units of N100 each at N103.50 by way of initial public offering (IPO). Stanbic IBTC Bank plc is the issuing house to the IPO, which is expected to open on Monday, August 30, 2010 and close on Thursday, October 30, 2010.


According to the fund manager, the primary objective of the SimCap value fund is to achieve long term capital growth by investing in listed Nigerian equities which the fund manager has identified as being “undervalued and offering above average growth potential, and other securities as approved by the Securities and Exchange Commission (SEC) from time to time.”


The fund will pursue this objective by investing in companies listed on the Nigerian Stock Exchange (NSE), thus enabling investors gain exposure to a concentrated portfolio of value stocks. The fund may also invest in fixed income securities and in unlisted equities, once the asset class has been approved by SEC.


SIM Capital Alliance would also benefit from the pedigree and experience of its promoters, Capital Alliance and Sanlam Investment in making successful investments in the Nigerian market. According to the offer prospectus, the fund will invest in the following asset classes: listed equities (25% – 85%); fixed income securities (15% – 50%); and cash (0% – 5%).


BusinessDay learnt that approvals for the registration and listing of the units of the fund had been obtained from the SEC and NSE.At the completion board meeting for the IPO, the fund manager, Steve Iwenjora, disclosed that “the fund is targeted at value approach investors with long term horizon, including institutional investors, savings and investment clubs as well as high net worth and retail investors.”


Also speaking at the meeting, executive director, corporate and investment banking, Stanbic IBTC, Yinka Sanni, urged investors “to seize this rare opportunity to invest in the Fund to benefit from the competitive returns they stand to gain from the disciplined investment approach of the Fund.”He also stated that investors stand to minimise their risks as a result of portfolio diversification as the Fund will also invest in unlisted equities once approved by the SEC. According to the fund manager, barring unforeseen circumstances, the projected net income for the years ending December 31, 2010, 2011 and 2012 will be in the order of N1.22 billion, N1.32 billion and N1.61 billion, respectively.


Capital Alliance is one of the foremost private equity firms in Nigeria and is Nigerian subsidiary of African Capital Alliance which manages a family of funds and has successfully launched five funds to date. Capital Alliance Nigeria has over US$540 million under management and has completed investments in 31 companies in a broad range of industries.


On the other hand, Sanlam Investment Management (SIM) is one of the largest investment managers in South Africa and the investment arm of Sanlam, a leading financial services group based in South Africa for over 80 years. Sanlam had about US$60 billion in funds under management as at 2009.





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