The Architecture of Deals: What UUBO Knows About Why Nigerian Funds Choose Mauritius

In this edition of Member Spotlight: Capital at Work, we shift from investor to architect. Every fund formation, every exit, every cross-border transaction in Nigeria's private capital market passes through a legal structure — and the quality of that structure determines what is possible. Udo Udoma & Belo-Osagie has been at that table for some of the most significant transactions in Nigerian PE history, and with a UUBO partner heading PEVCA's own Legal and Regulatory Committee, the firm sits at the exact intersection of legal practice and ecosystem policy.

In this feature, Folake Elias-Adebowale, Partner at UUBO, reflects on the structural and regulatory friction that shapes every deal in Nigeria's market — what is improving, what is not, and what would change if policymakers were willing to listen. From fund domiciliation to cross-border exit mechanics, this is a conversation the ecosystem has in private. We are having it in public.

Read the interview below:

1. Fund managers increasingly choose Mauritius over Nigeria as a fund domicile. As a firm advising on those decisions, what is your honest assessment of why that keeps happening — and what would need to change for Nigeria to become a genuinely competitive fund jurisdiction?

Folake Elias-Adebowale: The honest starting point is that most Africa-facing funds aren’t domiciled in the markets they invest into - they sit in international financial centres, with Mauritius being the leading single Africa-focused domicile, then Luxembourg, the Netherlands and Delaware. South Africa is a key manager market, but Mauritius remains the more common home for pan-African strategies.

The driver isn’t mainly tax; it’s LP familiarity, regulatory predictability, administrator depth, treaty access and currency mobility - ingredients international LPs and DFIs already understand. A Nigerian-domiciled fund struggles on registration speed, FX access, and the absence of a settled limited-partnership product. Yet AVCA finds 77% of GPs expect rising local-institutional influence over three years. To capture that, we need a fit-for-purpose vehicle, predictable SEC turnaround, clean repatriation, and proportionate capital. Until then, the flip offshore is rational, not disloyal.

2. Without naming names, what is the single most avoidable structural problem you see repeatedly on deals, and why does it keep recurring?

FEA: Leaving the exit to chance. Too many deals are negotiated hard on entry economics and treat transfer mechanics, drag and tag, ROFRs, ROFOs, reserved matters and consent thresholds as boilerplate. Years later, the route to liquidity is blocked by a provision nobody stress-tested. It recurs because exit feels distant at signing, and parties optimise for the round in front of them. The fix is unglamorous: design the exit at the term sheet, and pressure-test enforceability before you sign.

3. The SEC has introduced several reforms in recent years. From where you sit advising clients, what has actually moved the needle — and what still looks good on paper but does not change practice on the ground?

FEA: I would certainly not say that the SEC reforms ‘’only look good on paper’’ as that would be patently untrue. Take for instance the recent minimum-capital reforms. A genuine step forward is the Tier 3 carve-out for alternative managers - ₦500 million for PE, ₦200 million for VC – in the sense that they recognise that a lean PE or VC manager carries a different risk profile from a composite manager. That certainly moves the needle. One area that would benefit from clarity: as Tier 1 still references both PE and VC, it would help to confirm how the framework applies to a pure-play manager crossing an AUM threshold. A short interpretive note would settle it - the kind of engagement that the SEC has commendably shown openness to.

4. Cross-border exits involve currency repatriation, tax treatment, and multi-jurisdictional approvals. Where does that process most commonly break down for a typical Nigerian deal, and what does it cost managers in time and value?

FEA: Usually at the intersection of FX and documentation - which matters because exit conditions top investor concerns (73% of LPs according to AVCA), and every international LP citing macro risk names FX volatility. The most common failure is the Certificate of Capital Importation - misclassified, mismatched, or missing - which can trap repatriation of exit proceeds long after closing. Add tax on the gain, the indirect-transfer rules, and cross-border approvals, and a clean sale can stall for months. The cost is real: time, advisory spend, and sometimes value, where a delayed remittance meets a moving currency.

Q5. If you were advising the Nigerian government on three legal or regulatory changes that would most unlock private capital formation within five years, what would they be?

FEA: First, a competitive onshore fund vehicle - fix the Tier 1/Tier 3 ambiguity - plus pension-allocation clarity: how “the Fund” is read for concentration limits in parallel structures, and that venture capital is plainly permissible, so domestic capital can deploy without routing offshore.

Second, a specialised registration track for alternative managers, with defined timelines and a dedicated SEC team.

Third, legal foundations for private credit, the fastest-growing asset class (African private debt rose 57% in 2025): security perfection, faster enforcement, and predictable tax on carried interest, clawbacks and exit gains. None of these factors reinvents the system; each removes friction we meet daily.

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