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Chapel Hill Denham Nigeria Infrastructure Debt Fund delivers 22.2% return in 2018

Investors who parked their cash in the Nigeria Infrastructure Debt Fund (NIDF), managed by Lagos-based investment bank, Chapel Hill Denham, just saw off a 2018 to remember for good.

In a year when investors were hurt by negative returns on several asset classes from equities to mutual funds, the NIDF returned 22 percent, which is probably the best performing asset class for the year.

The NIFD’s return is some 700 basis points above the risk-free rate of 15 percent and betters the stock market’s negative 17 percent return.

Since inception in June 2017, the Fund has delivered a total return of 42 percent (assuming distributions were reinvested), as investors continue to enjoy consistent, attractive and predictable real returns real returns (above inflation), along with low volatility and principal preservation.

Despite being considerably riskier, equities haven’t matched that return in the period under review.

Besides delivering attractive returns, the NIDF is also at the core of Nigeria’s economic transformation by adding to the country’s infrastructure stock, channelling institutional capital into productive assets, and supporting sustainable economic growth. This makes the Fund an impact investor’s delight.

In the fourth quarter of 2018, the weighted average interest rate for the Fund’s portfolio of infrastructure loans was 19.3 percent, which is 470 basis points premium to the prevailing average yield on the 10-year Federal Government bond.

The Fund announced a quarterly distribution of N4.20 per Unit for the fourth quarter of 2018, the sixth consecutive quarterly distribution.

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With this quarterly distribution, the total cash distributions made by the Fund in the year ending December 2018 aggregated to N16.70 per Unit. This translates to a full year cash yield of 17.8 percent.

Qualification date for the Q4 2018 distribution is on January 2, 2019 and payment date will be on January 4, 2019.

The Chapel Hill Denham Nigeria Infrastructure Debt Fund is the first and only infrastructure debt fund dedicated to and domiciled in Nigeria.

The Fund is an Infrastructure Fund under the rules and regulations of the Securities & Exchange Commission, Nigeria and the National Pension Commission, Nigeria.

The Fund’s Units are listed on the FMDQ OTC Securities Exchange, Nigeria.

The Fund has registered a programme for issuance of up to two billion Units with par value of N200 billion.

Source: Lolade Akinmurele

 

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