L-R, Vice Chairman, Capital Market Correspondents Association of Nigeria (CAMCAN), Friday Ekeoba; Managing Director of Splitar Limited, Folagbade Adeyemi; Chairman CAMCAN, Chinyere Joel-Nwokeoma; and Head Marketing & Corporate Communications of VFD Group, Muyiwa Olowoporoku during the CAMCAN Quarterly Forum hosted by VFD Group with the theme “Beyond Tradition: Increasing Relevance of Alternative Assets in Capital Market” in Lagos, Herel Play, Ikoyi on Tuesday.

 

VDF Group Plc is calling for increased financing for Nigeria’s entertainment and media industry to drive foreign exchange earnings and economic development. Mr Folagbade Adeyemi, the Managing Director of Splitar Limited, revealed this at the Capital Market Correspondents Association of Nigeria (CAMCAN) quarterly Forum, sponsored by VFD Group Plc.
Adeyemi emphasized that the group is actively pursuing an exchange platform tailored to the media and entertainment sector, providing diverse investment opportunities for both domestic and international investors.

The platform, known as SplitXchange, is currently in development and will offer financing for the media and entertainment industry, along with other alternative assets. Adeyemi noted that seeing the tremendous potential in alternative assets, Splitar Holdings, through SplitXchange, would revolutionize the alternative assets space with a digital exchange.

With Nigeria’s population estimated at 208.8 million, Adeyemi highlighted the surging demand for Nigerian content. Speaking on the theme “Beyond Tradition: Increasing Relevance of Alternative Assets in Capital Market,” Adeyemi bemoaned the absence of robust funding pillars in the country. He noted that funding for the Nigerian entertainment sector primarily comes from outside the country.

According to him, the new market in alternative assets includes Arts and Commodities, Real Estate, and Entertainment and Media (E&M). Speaking specifically on the potential of Entertainment and Media, Adeyemi noted that globally, the sector’s market size is $41 billion as of 2021, with an estimated growth of 4.2 percent. However, Nigeria only earns $5 billion from E&M, while the United States earns $750 billion, and the United Kingdom, $140 billion.

Adeyemi pointed out investments by Netflix and Amazon, which have churned out blockbuster movies that have gained viewership and streams worldwide. He highlighted that Nigeria’s biggest investor in the form of Pension Assets was yet to invest in the entertainment or streaming services.

Adeyemi stressed the need to solve the problems of liquidity, efficiency, and barriers to entry in the country. He said, “In today’s market, the quick conversion of assets into cash is a challenge due to the absence of a well-structured marketplace that oversees and regulates these assets. The automation of processes such as compliance, escrow account management, dividend distribution, corporate action management, and drag-along actions technology presents a significant challenge in today’s alternative market. The high initial cost of assets in this market restricts participation to only affluent individuals and corporate investors.”

Adeyemi explained that the entertainment sector is dependent on the banking sector as the primary provider of funding. He noted that the sector remains excluded from the organized financial sector due to intermediaries’ inability to recognize Intellectual Property (IP) as a suitable collateral to access funding. “Projects are financed informally through a network of angel investors, high net worth individuals, non-governmental organizations, government, and personal savings,” Adeyemi said.

He further pointed out that “investors and asset creators face challenges when seeking investment opportunities or raising capital through traditional financial avenues. Traditional financial institutions are ill-equipped to appraise industry opportunities due to poor visibility, data and income/revenue leakages leading to mispricing through high-interest rates, market illiquidity of associated securities, poor market depth, and lack of accessibility for retail investors.”

In addition, conventional financing methods do not offer an efficient means to invest in fractional ownership of valuable assets. “This lack of accessibility hinders the growth of the investment market and restricts opportunities for both investors and asset creators,” he said.