The Retirement Benefits Authority (RBA) has announced an 8% year-on-year increase in the total assets under management by fund managers and approved issuers in Kenya.
According to the recently released RBA Retirement Benefits Industry report for December 2018, 16 fund managers and 15 approved issuers submitted 1,236 scheme reports with a total fund value of Sh980b representing an 8 % increase compared to the December 2017 values.
The report further confirms that the total assets managed by fund managers amounted to Sh813b while the approved issuers managed Sh167b at the end of December 2018.
In terms of investments by fund managers and approved issuers, Sanlam Investments East Africa Company Limited (SIEAL) maintained its industry lead as the fund manager with the largest pension scheme assets under management, totaling Sh202b which constitutes 20.6% of Kenyan pension sector assets.
“The retirement benefits sector is expected to grow this year given the relatively stable political environment and the gradual recovery of the stock market,” the RBA report states.
While commenting on the report, Sanlam Investments East Africa Limited, CEO, Mr Jonathan Stichbury said the firm is also “forecasting pension sector growth this year despite the potential challenges arising from the delayed long rains”.
“Increased food imports and reduced cash crop exports would normally be expected to exert pressure on the Kenya Shilling. However, this is likely to be mitigated by the high levels of forex reserves held by the Central Bank, strong diaspora remittances and proceeds from the recent Eurobond issue,” he noted.
According to the RBA report, schemes are also expected to venture into alternative assets given the broadening of the allowable investment categories and take advantage of the public infrastructural projects and more so under the big four agenda.”
The RBA report further indicates that government securities still accounted for the biggest share of the industry assets at 39.4%, followed by immovable property at 19.7% and then investments in quoted equities at 17.3% and investments in guaranteed funds at 14.4%.
Investment in private equity and venture capital increased to Sh864 million in December 2018 to account for 0.07% of the total pension sector assets, while investments in Commercial Paper and non-listed bonds decreased by 297 % to Sh60m.