Aureos Africa has reached advanced discussion with the board of Custodian and Allied Insurance Plc on an equity investment deal. A market source revealed to Vanguard that discussion between the parties would likely develop a mutually beneficial relationship that allows Aureos to tap into Nigeria’s emerging insurance industry and gives Custodian an international platform to explore global insurance market.

The source described the talks between the parties as involving several billions of naira but declined further specifics as both parties are keeping final details until necessary regulatory approvals are secured.

Aureos, a leading global private equity fund manager focuses on investments in small and medium companies in emerging markets worldwide. In August 2003, Aureos raised three private equity funds in Sub-Saharan Africa: the Aureos Southern Africa Fund (ASAF), the Aureos East Africa Fund (AEAF) and the Aureos West Africa Fund (AWAF) with combined committed capital of $140 million.

The African funds have invested in a wide range of sectors, including telecommunications, pharmaceuticals, plastics, fast-moving consumer goods and microfinance.

The Aureos West Africa Fund focuses on countries under the Economic Community of West African States (Ecowas), particularly Nigeria, Ghana and Senegal and has a committed fund of $50 million, about N6 billion.
Aureos is also targeting to raise US$400 million to start a new fund: Aureos Pan Africa fund (APAF), which will deepen its commitments to African economies.

Stockbroker, however said the choice of Custodian and Allied Insurance as investment vehicle for Aureos might not be unconnected with its pedigree and growing profile, since the company successfully recapitalized and list its shares on the Nigerian Stock Exchange (NSE).

As cardinal part of its investment policy, Aureos invests in businesses with proven track records and helps them reach their full potential by mobilising its management expertise and well-established global network.
Mr. Wole Oshin, managing director, Custodian and Allied Insurance Plc, confirmed that his company and Aureos were talking on wide-ranging possibilities but refused any further details.

Meanwhile Chief Michael Ade Ojo, chairman, Custodian and Allied Insurance Plc, however at the recently Annual General Meeting (AGM) in Lagos last week told shareholders that the company will add global perspective to its business by forging solid relationships with international insurance and reinsurance companies.

He said that the emerging insurance industry holds significant prospect pointing out that the local content policy in the oil and gas sector has thrown open a huge business opportunity that hitherto used to be exclusive preserve of foreign insurance companies.

“The insurance industry in Nigeria is still an emerging industry. It is relatively small when compared to other developing economies and is characterized by low awareness and therefore low market penetration. The implication of this is that the industry has obvious potentials which are untapped and therefore a bright future,” Ade Ojo said