Thursday’s news of the emergence of Advanced Finance and Investment Group (AFIG Funds), a growth and expansion private equity fund manager as new core investor, following its acquisition of 29.9% stake in NEM Insurance Plc, was greeted by positive investor sentiments on Friday.
Checks by Investdata News showed that at 1.00pm, the price of NEM Insurance was up by 9.7% trading at N2.48 per share on the Nigerian Stock Exchange (NSE). This price was sustained into the day’s close
AFIG, a leading African private equity fund manager had through its AFIG Fund II, completed the investment in NEM, by acquiring the shares from some existing shareholders, making AFIG Funds the largest shareholder in NEM.
Although, it would become clearer whose shares AFIG acquired, or whether any majority shareholder sold to the new core investors during the period, according to the 2017 audited financials of NEM Insurance, shareholders mandatorily declared as holding more than 5% stake in the company were three as of December 31, 2016. They are: JEIDOC Limited, represented by Chief Ede Dafinone, with 368,445,497 ordinary shares representing 6.98%; while Bukson Investment Limited, whose representative on the board was not mentioned, has 337,054,367 units, or 6.38% stake. Capital Express Assurance Limited held 383,492,958 ordinary shares, or 7.26%, bringing total stake of the three major shareholders to 20.62%.
The transaction by AFIG Funds, according to the statement, marks the commencement of a strategic partnership between AFIG Funds and NEM, as the company embarks on its next growth phase as a top-tier player within the Nigerian Insurance Industry.
Commenting on the transaction, Tope Smart, Group Managing Director of NEM Insurance, welcomed “AFIG Funds as a significant shareholder in NEM at such an exciting time in the company’s evolution.”
The partnership with AFIG Funds, he noted, “is the outcome of several years of constructive engagement, as well as a thorough internal strategic process to identify and engage with the best long-term institutional partner for our Company. We look forward to continue to benefit from AFIG Funds’ extensive experience investing in strong African companies particularly in financial institutions. We believe this partnership will accelerate the realization of our growth ambitions within Nigeria and across the continent. We are confident this will be a fruitful and mutually rewarding partnership.”
Kelechi Okoro, Director of Investments at AFIG Funds, said: “Through our engagement with NEM over the last several years, we have had the opportunity to observe its solid trajectory, and to develop confidence in the management team’s ability to seize growth opportunities in the increasingly competitive landscape”.
Also commenting, Papa Madiaw Ndiaye, CEO of AFIG Funds, said: “We are excited about our partnership with NEM Insurance and the Company’s strong growth prospects. NEM is one of the fastest-growing, best-capitalized and most consistently profitable underwriters in Nigeria. Our decision to invest in NEM during an election year in Nigeria, which is a time when foreign investors tend to shy away from emerging markets, is testament to our strong belief in the prospects of the Company and in the resilience of the broader economy. We are keen to begin working with management, the Board of Directors and other shareholders to execute on the many promising initiatives to further unlock the Company’s significant potential.”
CardinalStone Partners Limited and Koya Kuti Solicitors acted as Financial and Legal Advisers, respectively to NEM Insurance Plc, while PWC Nigeria and Banwo & Ighodalo were Transaction Advisers to AFIG Funds.