E-Financial
Understanding Private Equity and Alternative Investments
Although there are a variety of options for raising capital and attracting investors, equity is one of the two most sort after options. It allows a company to give a share of ownership of its business to an investor in expectation of a return as the business grows.
Unlike public equity (stock market) with ownership of shares in a public company, private equity (PE) simply means ownership of shares in a private company.
Private equity is a type of capital investment (asset or security) made to (target) companies that are not publicly traded on a stock exchange. As an alternative form of private financing, private equity allows investors directly invest in companies through which such investors gain an ownership stake in the companies.
Investors seek PE funds to earn returns that are considered to be better than those from the public equity markets.
To avoid debt, companies can sell its stocks to raise money that can be used to fund new technology, make acquisitions, expand working capital, and fund projects geared towards business growth.
Usually, the financial information on stocks of such a company is not disclosed to the public, rather an investor can only speculate on the asset worth of the intending company.
Private equity involves three parties: the investors who supply the capital, the private equity firm that manages and invests the money on behalf of the investor via a private equity fund, and the company (known as Portfolio Company) that the private equity firm invests in.
A private equity firm’s ultimate goal is to sell or exit portfolio companies to deliver superior returns (above the benchmark return also referred to as Internal Rate of Return (IRR) to earn carried interests).
The most widely adopted investment strategies by PE investments are leveraged buyouts (LBOs) and venture capital (VC) investments. In LBOs, a PE firm will raise debt from institutional investors on the back of a target company and assume control of the target company, while using the cashflows of the target company to pay the acquisition capital.
Whereas, the VC makes investment in young and fast-growing companies in an industry that has the potential for exponential growth while adding value to the firm being taken up. In some cases, PE firms grow and improve a middle-market company with the aim to sell or exit to a mature company within a specified period.
Generally, private equity firms are active investors who are involved in the board level and monitor the financial and operating performance of portfolio companies.
However, some private equity firms are involved in the day-to-day operations of portfolio companies and may take C-level positions such as CEO, CFO, CIO and COO to ensure that value creation initiatives are implemented in the portfolio companies to ensure that increase in revenue, improvement of operational efficiency and corporate governance.
A private equity fund is typically opened to institutional and accredited (individual or business entity) investors who invest large sums of money for a long period.
Institutional investors are companies or organisations like endowment funds, commercial banks, hedge funds, mutual fund managers, and insurance companies that invest money on behalf of other people.
Accredited investors on the other hand are individuals or a business entity that invest based on their income, net worth, asset size, governance status, or professional experience. The reason is that private equity as an asset class is generally illiquid and has a long lock-up period and only ideal for investors with a large asset size (or AuM).
Other alternative investments include infrastructure assets, art, antique furniture, automobiles, real estate, commodities, exchange-traded funds, and hedge funds.
The market performance of traditional investments and alternative investments are independent of each other, hence, the inclusion of alternative investments in a portfolio can reduce its risk through diversification.
Before the coronavirus outbreak, PE investments in Nigeria have been flourishing and as a result in 2019 Nigeria was described by the African Private Equity and Venture Capital Association (AVCA) as one of the most attractive destinations for PE investments. Between January and February 2019, PE in Nigeria recorded investments worth 277.64 billion ($767 million), an improvement of 345 per cent compared to 62.37 billion ($172 million) worth of deals closed during the corresponding period in 2018.
The deals within the first two months of 2019 included the 100 per cent acquisition of Chi Ltd by Coca-Cola Company for the sum of $500 million, which accounted for 65 per cent of the total private equity investments within that period.
Other notable deals included Access Bank Plc’s acquisition of Diamond Bank Plc., the Partech- led Series A funding of Kudi, a financial services provider, and the acquisition of Wakanow, a travel agency, by the Carlyle Group valued at $40 million, to mention a few.
Why Invest in Private Equity?
Private equity firms have grown over the years to become attractive investment vehicles for wealthy individuals and institutions who manage large pools of capital. PE often guarantee better returns compared to other investments, with some private equity managers outperforming the public markets.
To diversify holdings, investors turn to private equity for higher returns than do public market. Specifically, such investments are for investors who can afford to have capital locked up for long periods.
Investors in private equity funds are called limited partners. As a limited partner, you get a return on your investment when the private equity firm sells the company it purchases while the private equity firm (also called general partners) takes some percentage as profit.
In Nigeria, different PE firms like FBNQuest Funds have their specific deal sizes, investment horizons, sector focus, fundraising timelines, and exit strategies. As one of the leading alternative investments managers in Nigeria, FBNQuest Funds has been in operations for over 17 years and has invested in over 70 private companies through direct investing and their expertise and exposure to PE and VC Funds. Domiciled in Nigeria, the firm has investments in companies in Nigeria and other countries within the Sub-Saharan Africa region.
Ecobank Transnational Incorporated (ETI) has joined the trillion-naira exclusive club of firms, marking its first entry in its two decades of being listed on the Nigerian Exchange.
The Pan-African lender saw its valuation surge more than the N1 trillion mark on Monday, January 5, 2026. As of the close of trade on Monday, January 12, the stock had gained 7.4 percent, with its share price hitting N45. ETI has accrued 23 percent over the past four-week period alone, making it the 40th best on NGX.
“Ecobank Transnational Inc. is currently the 23rd most valuable stock on the NGX with a market capitalisation of N 1.07 trillion, which makes up about 1.02 percent of the Nigerian Stock Exchange equity market,” according to African Stock Exchange data, a market analytics platform.
This historic feat follows the early repayment of $245 million of Ecobank’s $300 million Eurobond issuance to bondholders who validly tendered their notes ahead of the February 2026 maturity date.
This must have led to an improved confidence in the bank’s operation, which gained 61 percent a year ago despite the sell-off that rattled the bank’s stock in 2025.
More Nigerian lenders are seeing their market capitalisation cross the N1 trillion mark, suggesting renewed investor confidence in the sector that’s undergoing a recapitalisation exercise.
GTCO remains the most capitalised, with its valuation reaching N3.62 trillion as of January 12, followed by Zenith Bank, First Bank of Nigeria, United Bank for Africa, Access Bank, and Stanbic IBTC with N2.75 trillion, N2.16 trillion, N1.94 trillion, N1.23 trillion, and N1.7 trillion, respectively. By crossing N1 trillion, Ecobank now sits among the country’s biggest lenders within the trillion-naira club.
Fidelity Bank, on April 4, 2025, saw its market value shoot above N1 trillion, making it the first tier-2 bank to cross the threshold. However, it slipped below the mark on May 20 following a Supreme Court ruling that pressured its share price. The bank’s valuation currently stands at N957 billion.
The membership of the exclusive club of listed companies with at least N1 trillion valuation has increased to 24, compared to 17 a year earlier, according to data from the Nigerian Exchange Limited.
The top five members include BUA Foods with a market cap of N14.38 trillion, MTN Nigerian Communications with N12.70 trillion, Dangote Cement with N10.71 trillion, Airtel Africa with N8.53 trillion, and BUA Cement with N6.2 trillion.
Wema Bank Plc has launched the upgraded version of its flagship digital banking platform, ALAT by Wema. Designed as the next phase in digital banking, the upgraded version of ALAT delivers a smarter, faster, and more intuitive experience, reinforcing Wema Bank’s leadership in technology-driven financial services.
Tagged ALAT: The Evolution, the upgraded version represents a significant advancement in how customers interact with their bank.
It enables seamless banking through intelligent features such as voice banking (called SAW), which allows customers to carry out banking activities using natural voice commands, reducing friction and improving accessibility.
It also introduces Tap and Pay for quick, secure, and convenient contactless transactions, alongside uptime prediction that enhances transparency, reliability, and confidence around service availability.
Together, these innovations are designed to simplify everyday banking while anticipating customer needs in real time, reinforcing Wema Bank’s commitment to trust, efficiency, and customer-centric digital experiences.
While announcing the upgraded version of the ALAT Banking app, Moruf Oseni, Managing Director and Chief Executive Officer of Wema Bank, said, “ALAT: The Evolution is more than an upgrade. It is a clear demonstration of our commitment to redefining digital banking in Africa.
“By understanding the future of banking and listening closely to our customers, we have upgraded ALAT by Wema to a digital banking platform that is smart, intelligent and dependable. This evolution reinforces our promise to deliver innovation that genuinely enhances how people live, work, and transact everyday.”
He added that migrating to the upgraded app is seamless. “Existing customers can simply visit the Google Play Store or Apple App Store to update their existing ALAT app and sign-in with their existing login details (All their account information and transaction history remain intact on their profile and they will also gain access to new features that make banking faster, more intuitive, and more reliable).
For new customers, all they have to do is visit the Google Play Store or Apple App Store to download ALAT by Wema app and click the Get Started icon to onboard seamlessly.
Speaking on the technology in the upgraded ALAT by Wema, Olusegun Adeniyi, Chief Digital Officer at Wema Bank, explained, “With ALAT: The Evolution, we set out to enhance not just functionality but the overall banking experience.
“By integrating voice banking, contactless payments, and predictive reliability, we are delivering a platform that is built on powerful technology and responds intelligently to customer needs. This upgrade reflects our long-term digital vision to create a digital bank that is adaptive, intuitive, and consistently available.”
Built on speed, intelligence, and user-centric design, ALAT: The Evolution redefines everyday banking through intuitive features such as voice-enabled transactions, contactless payments, and predictive service reliability. Designed to anticipate customer needs in real time, the platform delivers a smarter, more seamless, and dependable digital banking experience that reflects Wema Bank’s vision for the future of finance.
With the upgraded version of ALAT, Wema Bank continues to strengthen its position as a digital-first institution, delivering innovative solutions that empower individuals and businesses to bank with confidence in an increasingly digital economy.
Nigeria Deposit Insurance Corporation (NDIC) has declared a second liquidation dividend of ₦24.3 billion for depositors of Heritage Bank Limited (in liquidation) whose account balances exceeded the statutory insured limit of ₦5 million at the time of the bank’s closure.
Heritage Bank’s operating licence was revoked by the Central Bank of Nigeria (CBN) on June 3, 2024, after which the NDIC was appointed liquidator in line with the Banks and Other Financial Institutions Act (BOFIA) 2020 and the NDIC Act 2023.
In a statement signed by Hawwau Gambo, head of the Communication and Public Affairs Department, the Corporation said “the second liquidation dividend would be paid at a rate of 5.2 kobo per ₦1.00 on outstanding uninsured balances. This brings the total liquidation dividend paid so far to 14.4 kobo per ₦1.00.
“The NDIC has now declared a second liquidation dividend of ₦24.3 billion. This amount, derived from debt recovery, sale of physical assets, and realisation of investments, will be applied to the payment of uninsured balances for depositors with funds exceeding the ₦5 million insured limit. The second liquidation dividend is payable at a rate of 5.2 kobo per ₦1.00 on outstanding balances, in accordance with Section 72 of the NDIC Act 2023. This brings the cumulative liquidation dividend declared to date to 14.4 kobo per ₦1.00”.
The NDIC recalled that it had earlier paid a first liquidation dividend of ₦46.6 billion in April 2025, representing 9.2 kobo per ₦1.00, following the reimbursement of insured deposits of up to ₦5 million per depositor from its Deposit Insurance Fund.
According to the Corporation, the second tranche was made possible through sustained recovery of debts and continued asset disposal.
“This payment is in furtherance of our statutory responsibility to ensure that depositors of closed banks are reimbursed promptly as assets are realised,” the NDIC said.
The Corporation explained that payments would be made automatically to eligible depositors using existing records. Depositors who have already received their insured deposits and the first liquidation dividend will have their alternative bank accounts credited automatically through their Bank Verification Numbers (BVN).
However, depositors without alternative bank accounts or BVNs, as well as those who have not claimed their insured deposits or the first liquidation dividend, were advised to visit the nearest NDIC office nationwide or complete the e-claim form on the Corporation’s website for verification and processing.
The NDIC noted that liquidation dividends are paid only to depositors with balances above the insured limit and are sourced from asset sales and recoveries. Other creditors and shareholders will be considered only after all depositors have been fully reimbursed and subject to the availability of funds.
The Corporation assured the public that the ₦24.3 billion payment represents only the second liquidation dividend, adding that further payments would be made as additional assets are realised and outstanding debts recovered.
Depositors were advised to contact the NDIC Claims Resolution Department at any of its offices nationwide or through the Corporation’s official email addresses and helplines for further enquiries.
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