OVERHAUL

Reallocation of NSSF'S funds pushes Co-op Trust to top five list

According to RBA, the state owned pension fund allocated over Sh92 billion previously managed by Britam to Sanlam and CIC Assets Management Limited

In Summary
  • Sanlam is now the market leader, overseeing Sh288.8 billion after dethroning Gen Africa 
  • British-American Asset Managers has been kicked out of top five list
NSSF Building, NAIROBI/FILE
NSSF Building, NAIROBI/FILE

The transfer of the National Social Security Fund (NSSF) portfolio to Sanlam and Coop Trust Investment has tilted the market leadership of Kenya's fund management industry. 

According to the Retirement Benefits Industry Report for the year ended December 31, 2021, the reallocation by  NSSF has thrust Sanlam past the erstwhile industry leader GenAfrica to top industry rankings with Sh288.8 billion in funds. 

Sanlam received Sh46 billion from NSSF. The state-owned pension firm is the largest pension fund in Kenya with assets worth Sh290.3 billion, out of which Sh240.36 billion is managed by contracted fund managers, and the remainder is invested in-house.

GenAfrica has been the undisputed market leader for the past three years, commanding investments worth Sh237.6 billion in 2020, Sh203.6 billion in 2019 and Sh171.2 billion in 2018. 

The firm was, however, relegated to the second position with Sh270 billion followed by Old Mutual Asset Managers (OMAM) handling Sh199.5 billion.

According to the report, Coop Trust Investment Services which received Sh46.9 billion via CIC Assets Management Limited from NSSF grew its portfolio by Sh60.8 billion last year to command the fourth position in the fund management market.

The new rankings place Co-op Trust Investment Services, a wholly-owned subsidiary of the Co-operative Bank of Kenya, as the largest locally-owned fund management firm in Kenya. 

The entity was managing funds worth Sh182.4 billion by end of last year from a paltry Sh37.3 billion in 2018. 

ICEA Lion Asset Management closed the top five list with Sh79.5 billion in funds under management, locking out British-American Asset Managers Limited (BAAM) which has been holding the fourth position for the past three years. 

According to RBA's report funds managed by BAAM halved in 2021 after being dropped by NSSF. Its asset pool dropped from Sh154.6 billion in December 2020.

The annual industry report shows that the total investments held by NSSF continued to grow in the year 2021, expanding by  Sh10.63 billion to close the year at Sh290.3 billion.

The fund's internally managed assets amount to  Sh49.94 billion, the report adds, with the portfolio externally managed by fund managers increasing by Sh50.1 billion to Sh240.36 billion by the close of 2021.

The retirement sector regulator points out that the overall NSSF portfolio is invested in government securities representing 58.86 per cent of the total assets, followed by quoted equities and immovable property at 22.98 percent and 15.23 percent, respectively. 

Generally, the RBA report shows 17 fund managers and 17 approved issuers, submitted 1,172 scheme reports with a total fund value of Sh1.44 trillion representing 12.06 per cent compared to Sh1.28 trillion in 2020. 

The report further shows that most investors prefer government security, accounting for 45.6 per cent of total invested funds during the year under review. At least Sh706.99 billion was invested in the vehicle. 

This is followed by guaranteed funds at 16.7 per cent with the immovable property and quoted securities following at 16.45 per cent respectively. 

The RBA report also revealed that the amount invested in offshore schemes continues to grow, with Sh19.4 billion invested outside the country last year compared to Sh6 billion in 2018.