FSL Asset Management has launched a new Commodity Fund aimed at directing non-bank capital into Nigeria’s agricultural sector while providing investors with regulated exposure to commodity-linked investment opportunities.
The fund was unveiled during a media briefing in Lagos, where FSL Asset Management Chief Executive Officer, Adetola Odukoya, outlined the company’s strategy for addressing financing challenges across the agricultural value chain.
SEC-Regulated Investment Vehicle
The Commodity Fund operates as an open-ended unit trust scheme under Securities and Exchange Commission (SEC) guidelines.
According to FSL, the fund will invest primarily in:
- Securitised agricultural contracts
- Commercial papers issued by agricultural companies
- Exchange-traded commodities
- Commodity-linked fixed-income instruments
- Commodity-linked equities
It can access commodities listed on registered platforms, including the AFEX Commodities Exchange and Lagos Commodities Exchange.
The fund has a minimum initial subscription of ₦5 million and a minimum holding period of 90 days. It is targeted at high-net-worth individuals and qualified institutional investors.
Addressing Agricultural Financing Challenges
Odukoya said the initiative was developed to address two major challenges facing Nigeria’s agricultural market: the shortage of affordable and flexible capital for agricultural businesses and the growing presence of unregulated commodity investment schemes.
He noted that agriculture contributes roughly 25–30 per cent of Nigeria’s GDP, yet businesses across the sector continue to experience significant capital constraints.
The new fund is therefore designed to create a formal channel through which investors can participate in agricultural and commodity markets while legitimate businesses gain access to additional sources of financing.
Flexible Investment Strategy
FSL said the fund’s investment structure allows flexibility in allocating capital.
Up to 50 per cent of the portfolio may be allocated to securitised commodities, depending on the risk and characteristics of individual opportunities. The fund can also invest in commodity-related equities and fixed-income instruments, while cash may account for up to five per cent of the portfolio.
The company said it will not invest simply to meet a particular allocation where an opportunity does not satisfy its risk criteria.
FSL Also Launches ₦2bn Balanced Fund
Alongside the Commodity Fund, FSL Asset Management introduced the FSL Balanced Fund, a ₦2 billion open-ended investment scheme designed to provide moderate capital growth through a diversified portfolio of equities, fixed-income securities and money-market instruments.
The Balanced Fund has a minimum subscription of ₦100,000 and also carries a 90-day minimum holding period. The two new products bring FSL Asset Management’s active mutual-fund portfolio to four, alongside its existing Money Market Fund and Eurobond Fund.
Potential Boost for Agribusiness
The launch comes as farmers, processors and other agricultural businesses continue to seek more reliable sources of financing.
By connecting investors with agricultural assets through a regulated structure, the Commodity Fund could help widen the pool of capital available to businesses across Nigeria’s agricultural value chain.
For Nigeria, where access to affordable agricultural finance remains a major constraint to expanding production and processing, the initiative represents another attempt to bring private capital into one of the country’s most important economic sectors.
