UCIF Posts 24.62% Return Amid Nigeria’s Infrastructure Financing Gap

By Kingsley Ani

United Capital Infrastructure Fund (UCIF), a Securities and Exchange Commission (SEC) licensed infrastructure debt fund operated by United Capital Plc, reported a strong financial performance for the year ended December 31, 2025.
The fund delivered a 24.62 percent gross return, supported by income growth from its diversified infrastructure loan portfolio.
Total income rose to N3.06 billion, representing a 54.5 percent year-on-year increase, highlighting rising demand for private capital financing in infrastructure projects across Nigeria.
Since inception, the fund has distributed N6.19 billion to qualified unitholders, positioning itself as one of the emerging capital market vehicles targeting long-term infrastructure financing.

DECISION HIGHLIGHT
United Capital Infrastructure Fund recorded a 24.62 percent gross return in FY 2025, with total income rising to N3.06 billion, reflecting strong performance in its infrastructure lending portfolio.
UcheNna Mkparu, Chief Investment Officer and Fund Manager at United Capital Infrastructure Fund, said that the results reflect disciplined asset selection and predictable cash flows from infrastructure projects.
According to Mkparu, the fund remains focused on building “a resilient, diversified portfolio that delivers competitive returns while supporting infrastructure development.”

DECISION MEMO
Nigeria’s infrastructure financing challenge has increasingly pushed policymakers and private financial institutions to explore alternative capital market solutions capable of mobilising long-term funding.
Traditional public financing channels have proven insufficient to close the country’s infrastructure deficit, estimated by various development institutions to require hundreds of billions of dollars in long-term investment.
Infrastructure funds such as the UCIF represent one attempt to bridge that gap by channeling institutional and private capital into infrastructure-linked debt instruments.
Unlike conventional mutual funds focused on equities or government securities, infrastructure debt funds typically invest in projects with long-term revenue streams, such as power generation, gas infrastructure, healthcare facilities and industrial production assets.
Mkparu attributed the fund’s performance to its investment strategy focused on infrastructure assets capable of generating stable cash flows.
The structure allows investors to earn relatively high returns while providing project developers with longer-tenor financing than conventional bank loans.
The fund’s performance also reflects the broader macroeconomic environment. Nigeria’s high interest rate cycle has increased returns on debt instruments across financial markets, making infrastructure lending particularly attractive to investors seeking yield.
Peter Ashade, Group Chief Executive Officer of United Capital Plc, framed the fund’s role within a broader strategy to mobilise domestic capital for infrastructure development.
Ashade stated that innovative capital market instruments could play a critical role in addressing Africa’s infrastructure financing gap.
He argued that long-term naira-denominated capital remains essential for infrastructure development, particularly in sectors such as energy, manufacturing and agribusiness.
The fund’s investment strategy also emphasises sustainability-linked infrastructure projects, including renewable energy and circular economy initiatives.
UCIF currently maintains a zero non-performing loan portfolio, suggesting strong asset performance across its investment portfolio.
However, the long-term success of such infrastructure funds will depend heavily on project execution, regulatory stability and macroeconomic conditions affecting infrastructure demand.

DATA BOX
Gross return FY 2025: 24.62%
Total income FY 2025: N3.06 billion
Year-on-year income growth: 54.5%
Total distributions to investors since inception: N6.19 billion
Fund size: N150 billion
Investment sectors:
Gas infrastructure
Captive power
Healthcare
Agribusiness
Manufacturing
Industrial recycling
Renewable energy
Portfolio performance indicator: Zero non-performing loans

WHO WINS / WHO LOSES
Institutional investors and high-net-worth individuals benefit from access to infrastructure-linked investment vehicles offering relatively high returns.
Infrastructure project developers gain alternative financing channels beyond traditional bank lending.
Capital market intermediaries also benefit as infrastructure funds expand the range of investment products available to Nigerian investors.
However, infrastructure borrowers may face higher financing costs if returns demanded by investors remain elevated in Nigeria’s high-interest-rate environment.

POLICY SIGNALS
The performance of the fund reflects a broader policy shift toward private capital mobilisation for infrastructure development.
It also signals growing acceptance of infrastructure investment funds as part of Nigeria’s capital market architecture.
Such instruments align with government objectives to reduce reliance on public borrowing while expanding infrastructure financing capacity.

INVESTOR SIGNAL
Strong returns and rising income suggest growing investor appetite for infrastructure-backed financial products.
Infrastructure debt funds may become increasingly attractive to investors seeking diversification away from government securities.
The expansion of such funds could deepen Nigeria’s capital markets while supporting long-term project financing.

RISK RADAR
Infrastructure investment remains exposed to regulatory and policy risk, particularly in sectors such as energy and industrial production.
Macroeconomic instability, including inflation and currency volatility, may also affect project profitability and investor returns.
Project execution risk remains another key concern, as delays or operational inefficiencies in infrastructure projects can undermine expected cash flow projections.