Britam, Old Mutual control 61pc of money in unit trusts
Transport secretary Michael Kamau (left) receives a trophy from Britam Group board chairman Francis Muthaura (centre) and managing director Benson Wairegi during the launch the firm’s corporate bond in Nairobi on Tuesday. Photo/Salaton Njau
What you need to know:
Britam says it has Sh12.45 billion or 36 per cent of the Sh35 billion segment where 14 firms compete for business.
It added that Old Mutual had Sh8.89 billion or 25 per cent of the industry under its direction followed by African Alliance with Sh3.17 billion or nine per cent and Stanlib Investments with Sh2.9 billion or eight per cent.
That leaves the other 10 players competing for only 12 per cent of the market, reflecting the oligopolistic structure of most sectors in Kenya.
Britam and Old Mutual control more than six in every 10 shillings that investors put in unit trusts, the recommended avenue for individuals seeking to invest in volatile markets.
Britam states in an information memorandum for its Sh6 billion bond that was launched Wednesday that it had Sh12.45 billion or 36 per cent of the Sh35 billion segment where 14 firms compete for business.
“British-American Asset Managers Limited has been the industry leader in the unit trust market, growing its market share to 36.0 per cent as of December 2013,” said the Britam information memo.
It added that Old Mutual had Sh8.89 billion or 25 per cent of the industry under its direction followed by African Alliance with Sh3.17 billion or nine per cent and Stanlib Investments with Sh2.9 billion or eight per cent.
That leaves the other 10 players competing for only 12 per cent of the market, reflecting the oligopolistic structure of most sectors in Kenya.
The number of unit trusts have been growing, riding on the back of competing offers by fund managers and investment banks as well as lessons from the stock market crash of 2007 during which investors who approached the market without professional advice burnt their fingers.
Most stock brokerage houses now have a separate arm for unit trusts, whose prices are listed on the Nairobi Securities Exchange. CBA Capital, Suntra Investments, Dyer and Blair and Standard Investment Bank have such desks.
According to a CMA brief, Britam requires a subscriber to invest a minimum of Sh250,000 starting with an initial Sh150,000 and four instalments of Sh25,000 per month.
At Old Mutual, an investor has to put in a minimum of Sh200,000 for each of the funds, including equity, money market and balanced funds.
Stanlib Unit Trust Scheme, at Sh1 million, has the highest entry point for investors in unit trusts, followed by Commercial Bank of Africa with Sh500,000.
Zimele Asset Managers has the lowest bar at Sh5,000.
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