FSL launches Commodity Fund to boost agric investment

FSL Asset Management has officially unveiled its Commodity Fund, a strategic investment instrument designed to inject non-bank capital into Nigeria's agricultural sector while providing regulated exposure to high-yield commodity instruments for both retail and institutional investors. During a press conference held at the company's Lagos office, FSL's Chief Executive Officer, Adetola Odukoya, joined key executives to detail the firm's plan to address the multi-billion-naira financing gap plaguing agribusinesses nationwide.

The Commodity Fund, operating as an open-ended unit trust scheme under Securities and Exchange Commission guidelines, primarily invests in securitized agricultural contracts, commercial papers from leading agri-firms, and exchange-traded commodities listed on registered platforms like AFEX and Lagos Commodities Exchanges. With a minimum initial subscription of N5 million for high-net-worth individuals and qualified institutional investors, the fund mandates a holding period of 90 days.

Odukoya highlighted that the fund targets two critical market issues: providing affordable, flexible capital for agricultural production and processing, and safeguarding everyday investors from unregulated, high-risk commodity schemes. He stated, "Agriculture contributes around 25 to 30 percent of Nigeria's GDP and remains a key engine of economic growth, yet it continues to grapple with significant capital constraints.

Through this commodities fund, we aim to create a transparent, SEC-regulated avenue for investors to earn competitive returns from high-growth agricultural assets while simultaneously providing lower-cost financing to legitimate operators across the agricultural value chain." The launch of the Commodity Fund coincides with the introduction of the FSL Balanced Fund, a N2 billion open-ended scheme targeting moderate capital growth via a diversified portfolio of equities, fixed income, and money market instruments.

The two new offerings bring FSL Asset Management's total active mutual funds to four, complementing its existing Money Market Fund and Eurobond Fund. Established from a unit within Fidelity Bank, FSL Asset Management now serves as a key subsidiary under FSL Capital, a holding company with over 38 years of experience. The asset management arm currently manages over N50 billion in total assets under management, holding a Triple-B rating by Agusto & Co. With shareholders' funds exceeding N2 billion, the company is actively working to increase its capital base toward the N5 billion minimum requirement for tier-one asset management firms.

Odukoya announced that additional product additions, including dedicated equity and fixed income funds, are planned for release before the end of the year.