FBN Capital’s N5bn Heritage Fund promises exciting returns
The Fund, which is the first in the series of many others, is an open-ended fund, which allows collective investment through the pooling of funds from individuals and institutional investors. An initial tranche of 50 million units of N100 each opened for subscription to the public on Monday and would run through December 28, 2007.
Bayo Adeleke, managing director of the company said the fund has been structured to guarantee total return through a combination of growth and dividend income. Also, the fund affords investors the opportunity of diversifying their investment into various sectors through pooling of fund.
According to him, the aim of the fund is to achieve long-term capital gain by investing in a diversified portfolio comprising of high quality securities quoted on the Nigerian Stock Exchange (NSE) as well as fixed income from money market instruments and bonds, real estate and other securities approved by the Securities and Exchange Commission (SEC) and the Trustees to the Fund.
The prospectus of the N5 billion offer, indicates that between 50 and 65 percent of the fund would be invested on quoted securities, 15 to 25 percent in fixed income instrument, 5.0 to 10 percent on money market instruments while a maximum of 5.0 percent would be invested in real estate.
The forecast of offer returns as stated in the prospectus shows that investors should expect 14.25 percent, 27 percent and 29 percent returns on their investment in 2009, 2010 and 2011 respectively.
Adeleke said the fund would not offer a fixed or guaranteed returns because the bulk of it would be invested in equities.
However, the total return would be achieved through a combination of capital appreciation and dividend income.
He listed the benefits of the FBN Heritage Fund to include a balanced asset allocation structure, which ensures more widely spread risk, superior returns above inflation and money market yield, as well as the ability to use the fund as collateral to obtain loan from banks.
To invest in the Fund, a minimum of N50,000 being value for 100 units is required and subsequently further investment would be in multiples of 10 units. Adeleke explained that being an open-ended fund there is no limit to amount that can be invested, as such investments into the fund
can be increased by N10,000 each month even after the closure of the offer on December 28.
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