Nigeria Wealth Fund Stocks Too Pricey?

Nigeria Wealth Fund Stocks Too Pricey?

From Bloomberg

Uche Orji, the Harvard-trained head of Nigeria’s sovereign wealth fund, said he’s worried about rising stock prices as he prepares to hand over the next tranche of the fund’s $1 billion of holdings to external fund managers.

“A lot of asset classes are richly valued frankly,” Orji, a former Goldman Sachs Inc (GS) banker and chief executive officer of the Abuja-based Nigerian Sovereign Investment Authority, said in an Sept. 5 interview. “There’s still a lot I’m not comfortable with in developed market equities. I’m not going to try and be a hero and catch a falling knife with people’s money.”

The Authority is seeking returns of 400 basis points above U.S. CPI in its $325 million future generations fund, one of three such pools created to manage the $1 billion, and plans to be fully invested by the middle of next year. It will weigh investments in about eight asset classes from private equity to developed and emerging-market stocks even as some securities gained on signs the global economic recovery is taking hold.

Orji said he’s working with Cambridge Associates LLC on filtering possible managers for the future fund after tapping former employers Goldman Sachs and UBS AG (UBSN), along with Credit Suisse Group AG (CSGN), to help manage a separate $200 million fixed income fund. That accounts for about 20 percent of the fund’s total portfolio and will start reporting performance next month.

Borrowing costs are soaring from record lows reached in January as speculation deepens that the Fed will curtail its so-called quantitative easing as soon as this month, signaling an end to cheap money that propped up asset prices.

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