Abstract:
Pension funds play a crucial role in providing long-term finance for capital investments, including real estate, due to the accumulation of funds from contributions made by employers and employees towards retirement. The impact of real estate investments on both developed and developing economies is significant. In the context of Nigeria, pension funds hold vast resources, amounting to trillions of naira, sourced from the contributions of employees in both the public and private sectors. However, the performance of real estate (RE) investments within pension fund portfolios (PFP) has fallen short of expectations.
This study aims to assess the performance of real estate investments in Nigerian pension fund assets. Secondary sources of data were utilized, and both descriptive and inferential methods of analysis were employed. The results indicate that real estate underperformed in comparison to other pension assets, ranking sixth in terms of risk-return at 59% (0.59), with the lowest average return at 10.51%. Furthermore, correlation analysis revealed that real estate (RE) maintained a weak positive relationship with six assets, including federal government securities (FGs), open and close-end funds (OCEF), local money market securities (LMMS), local ordinary shares (LOS), corporate debt securities (CDS), and state governments (SGs). However, it exhibited a negative relationship with three other investment options within the pension fund portfolio: cash and other assets (COA), private equity (PEQ), and foreign investment (FINV).
In conclusion, this study highlights the importance of strategic decision-making at the organizational level of pension fund entities to enhance the value of real estate performance within PFP. Aligning real estate decision-making with the overall investment strategy is crucial to improving the contribution of real estate investments to the overall performance of pension funds.
An Evaluation of Real Estate Performance in the Context of Nigerian Pension Fund Assets. GET MORE, ACTUARIAL SCIENCE PROJECT TOPICS AND MATERIALS
