Afrinvest Business Model Overhaul Focuses on Fee Income, Cuts Down Proprietary Risk

Afrinvest (West Africa) Limited has undergone a strategic business model transition from a guaranteed return and principal structure to a fee-based portfolio management framework.

According to management, the proportion of own-risk on-balance sheet exposures moderated significantly to 20% as of June 2025 from 58% in the prior year, and 70% as at 30 June 2023.

Afrinvest’s operating revenues have maintained a positive growth trajectory, registering a three-year compound annual growth rate (CAGR) of 25.4% to N6.3 billion in 2024, which translated to a return on assets (ROA) and return on equity (ROE) of 0.21% and 4.0% respectively.

By the first half of 2025, annualized return on assets (ROA) and return on equity (ROE) had strengthened to 2.4% and 28.4% respectively. However, competitive position remains a negative rating factor due to the Group’s relatively small size within the broader asset management and investment banking space which is dominated by large banking groups.

In the fiscal year 2024, the Group maintained a conservative investment strategy, prioritising low-risk highly rated sovereign securities. Hence, the impairment charge as a percentage of earning assets moderated to 0.6% as of June 2025 from 1.3% in December 2023.

Afrinvest is a West Africa- focused non-operating capital market holding company with six operating subsidiaries: Afrinvest Asset Management Limited (AAML; asset management), Afrinvest Capital Limited (ACL; investment banking), Afrinvest Consulting Limited (ACOL; investment research and consulting), Afrinvest Securities Limited (ASL; securities trading), Afrinvest Trustees Limited (ATL; trust services) and Andromeda Technology Solutions Limited (ATSL; financial technology). the next 12–18 months.

The Group also benefits from a well-established brand franchise in the Nigerian financial market, built over its 28 years’ operating history. Over the past two years, Afrinvest has prioritised strengthening its digital capabilities with the launch of ‘Optimus 2.0’ in 2024 boosting total funds under management (including off-balance sheet assets) while the recently launched ‘Afrinvestor’ web platform marked a digital milestone for the securities business.

Furthermore, in 2025, ASL was admitted to the NGX Traded Derivatives Market, enhancing regulatory credibility and positioning the subsidiary for further growth.

Although operations remain concentrated in Nigeria, the Group is gradually expanding its regional footprint within the country as part of a broader diversification strategy.

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