Nigerian pension funds investments in infrastructure funds grew by 48.1% year-on-year, YoY to N262.567 billion in 10 months ended October 2025, 10M’25, driven by diversification strategy and efforts to bridge the nation’s massive infrastructure gap.
Vanguard’s findings from the latest data released by the Pension Commission of Nigeria, PenCom, showed that PFAs committed N262.567 billion in 10M’25 to infrastructure funds against N177.236 billion in the corresponding period 2024.
Similarly, the PFAs committed N36.609 billion in corporate infrastructure bonds in 10M’25 against N15.916 billion in 10M’24 indicating a 130% increase.
Key drivers include rising returns , a more supportive regulatory environment , which had led to rising allocations to corporate infrastructure bonds, which surged by over 130%, and a broader trend towards alternative assets for diversification, according to data from the National Pension Commission, PenCom.
Analysts noted that the infrastructure fund growth reflects improved project structuring, higher yields, and strategic diversification by Pension Fund Administrators (PFAs) seeking better returns in attractive alternative assets, even as the exposure stood at 1.4% of overall total pension assets of N26.661trillion as at the period under review.
The analysts added that Nigeria has a huge infrastructure deficit and requires up to $3 trillion investment over the next 30 years bridging this gap.
Reacting to pension funds’ investment, Michael Oyebola, Managing Director, Money Counsellors, said: “Pension Funds have seen the benefits of playing in that segment, a more prominent role in financing infrastructure projects, particularly through vehicles like the Nigeria Infrastructure Funds, Infrastructure Bonds and others which will help address the country’s infrastructure deficit while targeting stable, long-term returns.”
He added that the outlook for the Nigerian pension industry remains positive, with continued growth driven by regulatory advancements and expanding investment opportunities.
“The PFAs have increased allocations to alternative investments, such as infrastructure, private equity, and venture capital. This shift aligns with global trends and supports the diversification of pension fund portfolios, helping to ensure higher returns and contributing to broader economic development. Moreover, expanding the involvement of the informal sector in pension contributions is expected to further boost the industry’s asset base and broaden its reach.”
In his own reaction, David Adonri, Analyst and Vice Executive Chairman at Highcap Securities Limited, said: “A high-yield environment was the main attraction for these players.
“Pension fund managers view infrastructure as an attractive alternative asset class for long-term returns. PFAs rebalance portfolios towards higher-yielding assets like infrastructure to optimize returns and a huge infrastructure financing gap in the country creates demand for private capital.
With its growing asset base, strategic diversification, and a favourable regulatory environment, the Nigerian pension industry is positioned for sustained growth.”
