The Retirement Benefits Authority (RBA), a regulator for Kenya’s pension industry, has announced an 8% year-on-year increase in the total assets under management by fund managers and approved issuers in the country.
According to a 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 Ksh980 billion (about $9.8 billion) representing an 8% increase compared to the December 2017 values.
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 Ksh202 billion (about $2.02 billion). This constitutes 20.6% of Kenyan pension sector assets.
Sanlam Investments East Africa is a leading fund manager in the region and has a strong record of accomplishment in service delivery and investment performance.
As of 31 December 2018, SIEAL had over Ksh277 billion (approximately $2.7 billion) in assets under management. SIEAL is part of Sanlam Ltd which is a leading financial services group with operations in more than 30 African countries.
Commenting on the report, Sanlam Investments East Africa Limited, Chief Executive officer, Mr. Jonathan Stichbury, said the firm is also “forecasting pension sector growth this year despite the potential challenges arising from the delayed long rains”.
He was referring to Kenya’s long rainy season, which is a major driver of the country’s rain-fed agriculture sector.
“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 said.
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 Big Four Agenda is an ambitious development plan fronted by Kenya’s government that seeks to improve the country’s manufacturing industry, enhance foo security, boost its healthcare system and provide affordable housing.
The RBA report also stated that the retirement benefits sector is expected to grow this year given Kenya’s relatively stable political environment and the gradual recovery of the stock market.