July 20, 2023
The Kenya Pension Funds Investment Consortium (KEPFIC) is actively reviewing a diverse range of infrastructure and alternative investment proposals, collectively valued at over Ksh. 700 billion. These proposals have been submitted by project sponsors and fund managers, who are seeking capital from local retirement benefits schemes. This move comes as pension schemes in Kenya aim to bolster their investment portfolios by venturing into new sectors to potentially achieve higher returns.
The recently concluded two-day KEPFIC Annual Investment Conference in Nairobi served as a platform to present the shortlisted investment opportunities to local pension fund investors. The event facilitated engaging discussions among project sponsors, fund managers, and industry experts. The proposed projects cover a wide array of sectors, including energy, transport, affordable housing, healthcare, agriculture, micro, small, and medium-sized enterprises (MSMEs), as well as information and communications technology (ICT), among others.
Ngatia Kirungie, the Head of the KEPFIC Secretariat and CEO of Spearhead Africa, highlighted the active pursuit of profitable, secure, and impactful investments by Kenyan pension schemes during the conference opening. Infrastructure and alternative assets have emerged as attractive, yet underutilized asset classes for pension schemes, offering potentially appealing returns and much-needed portfolio diversification benefits, ultimately enhancing overall investment performance.
The pension industry assets under management in Kenya currently stand at approximately Ksh 1.5 trillion. According to the Retirement Benefits Authority’s investment guidelines passed in 2020, pension funds are allowed to allocate up to 10% of their assets to infrastructure investments. Traditionally, pension funds in Kenya have predominantly invested in government securities, listed equities, and direct property investments. However, the largely untapped potential for profitable and sustainable long-term infrastructure investments presents an opportunity for diversification and growth.
photo source: google
Delino Gayweh
Serrari Financial Analyst
