London-based alternative investment firm TLG Capital has announced plans to triple its naira exposure to ₦30 billion, underscoring growing foreign investor confidence in Nigeria’s stabilising macroeconomic and credit environment.
The decision was disclosed by Isaac Marshall, who cited strengthening foreign-exchange reserves, improving currency stability, easing inflation pressures, and solid underlying cash-flow performance across TLG’s Nigerian portfolio companies.
The expanded allocation will be deployed through the FCMB-TLG Nigeria Fund, Nigeria’s first large-scale, SEC-regulated, naira-denominated private credit fund, which has a total planned size of ₦100 billion.
Why This Is Significant
At a time when global capital markets are unsettled by geopolitical risk, tighter financial conditions, and policy uncertainty, Nigeria’s re-emergence as a destination for local-currency private capital marks a quiet but important shift.
Unlike short-term portfolio inflows chasing carry-trade opportunities, private credit commitments represent locked-in, long-duration exposure to the real economy. They require confidence not only in headline macro indicators, but also in regulatory continuity, contract enforcement, and borrowers’ ability to generate sustainable naira cash flows.
TLG’s decision to deepen its exposure therefore reflects a judgement that Nigeria has crossed a threshold—from uninvestable volatility to manageable risk.
The FCMB-TLG Nigeria Fund: Structure and Focus
The increased naira allocation will flow through the FCMB Asset Management Limited–TLG Nigeria Fund, which is anchored by 17 Nigerian institutional investors and targets high-quality, naira-earning businesses.
The fund’s Series II will expand lending to carefully selected SMEs and mid-market firms identified jointly by FCMB Asset Management and TLG Capital, with an emphasis on:
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Predictable and defensible cash flows
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Limited or no foreign-exchange exposure
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Strong governance and reporting standards
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Clear repayment capacity under conservative assumptions
The structure is deliberately commercial rather than concessional, reinforcing TLG’s view that African private credit can scale on market pricing and disciplined structuring—not donor subsidies.
Partnership Model and Sector Focus
In Nigeria, TLG operates in collaboration with FCMB Asset Management Limited, which acts as the fund manager and fiduciary partner. TLG provides technical support and structuring expertise, while FCMB contributes local distribution capability, regulatory compliance, and investor relationships. The FCMB-TLG Private Debt Fund focuses on deploying long-term, naira-denominated credit to high-impact mid-market firms, SPVs, and SMEs across key sectors, including:
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Agriculture
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Healthcare
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Education
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Clean energy
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Transport and logistics
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Technology and IT services
- Manufacturing
The fund structure appeals to domestic institutional investors, pension administrators, and qualified high-net-worth individuals, offering competitive risk-adjusted returns while supporting sustainable growth and employment creation.
TLG Capital: Origins, Strategy, and Its Recent Entry into Nigeria
TLG Capital is a London-headquartered private investment firm, founded by Tom Greenwood, with a long-standing focus on private credit, structured finance, and impact-oriented investing across Sub-Saharan Africa.
The firm has historically operated across multiple African markets, deploying capital into businesses that sit between commercial bank lending and development finance—often where conventional funding is unavailable or mispriced.
Nigeria: A Deliberate and Recent Entry
Crucially, TLG’s formal entry into Nigeria’s regulated private credit market is recent.
In May 2024, TLG co-launched the FCMB-TLG Private Credit Fund, marking its first institutional, SEC-regulated platform dedicated to Nigeria. The partnership with FCMB Asset Management provided the regulatory, distribution, and fiduciary infrastructure required to operate at scale in Nigeria’s domestic capital market.
Rather than replicate offshore structures, TLG opted for a local-currency, locally anchored fund, reflecting lessons from years of currency volatility and FX scarcity in Nigeria.
How TLG Operates in Nigeria
In Nigeria, TLG:
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Invests exclusively in naira-denominated instruments
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Partners with a regulated Nigerian asset manager for fund management and compliance
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Focuses on sectors driven by domestic demand rather than FX arbitrage
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Applies bespoke structuring rather than standardised loan products
This model allows TLG to manage currency risk structurally, rather than hedge it expensively—an approach that has gained relevance as Nigeria’s FX regime normalises.
Explainer: What Is Private Credit—and Why It Matters Now
What Is Private Credit?
Private credit refers to non-bank lending provided directly by investment funds to businesses, outside public bond markets and traditional bank loans. These loans are privately negotiated and tailored to borrowers’ operational realities.
Private credit funds typically lend to:
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SMEs and mid-market companies
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Businesses requiring growth or working capital
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Firms underserved by conventional banks
How It Differs from Bank Lending
Compared with commercial banks, private credit funds:
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Are not constrained by deposit funding or Basel capital rules
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Can offer longer tenors and flexible repayment schedules
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Price risk explicitly and transparently
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Often embed governance and performance covenants
Why Private Credit Is Expanding in Nigeria
Nigeria’s banking system is liquid but structurally conservative, particularly for long-tenor lending. Meanwhile, many viable businesses generate steady naira revenues but cannot access appropriately structured financing.
Private credit fills this gap by:
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Providing growth capital without equity dilution
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Matching debt service to cash-flow cycles
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Supporting sectors critical to domestic economic activity
In this context, naira-denominated private credit is emerging as one of the most credible channels for long-term capital formation in Nigeria.
Why This Matters for Nigerian Banks and Pension Funds
TLG Capital’s deepening commitment to naira-denominated private credit has implications beyond one fund or one foreign investor. It speaks directly to two of Nigeria’s most powerful but constrained pools of capital: commercial banks and pension funds.
For Nigerian Banks: De-Risking Without Disintermediation
Nigeria’s banking sector is liquid but cautious. Regulatory capital requirements, asset-liability mismatches, and heightened credit scrutiny have pushed banks toward short-tenor lending, government securities, and FX-linked exposures.
Private credit funds such as FCMB-TLG allow banks to participate in real-economy financing without carrying full balance-sheet risk—through co-origination, risk distribution, and fee-based income—while specialist funds absorb long-tenor credit exposure.
For Pension Funds: A Missing Asset Class Comes of Age
Nigeria’s pension industry now manages over ₦20 trillion in assets, yet remains heavily concentrated in government securities and money-market instruments.
Naira-denominated private credit offers pension funds predictable cash yields, senior secured exposure, low correlation with listed equities, and inflation-resilient income streams. Importantly, funds like FCMB-TLG are locally regulated and institutionally structured, addressing long-standing governance concerns.
The Bigger Picture
TLG Capital’s decision to triple its naira exposure is not merely a firm-level allocation choice. It reflects a broader reassessment of Nigeria by sophisticated, risk-aware capital.
If macro stability holds and credit performance remains strong, Nigeria could see a structural deepening of its private credit market, reducing reliance on volatile portfolio inflows and concessional finance. For now, the ₦30 billion commitment stands as a clear signal that foreign private capital is beginning to price Nigeria for recovery rather than crisis.