Liberty eyes higher returns from property market

Liberty Insurance, a major shareholder of CfC Insurance Holdings (CfCIH), plans to diversify into commercial property to increase its income streams.

The new strategy is expected to provide stable and reliable returns, a departure from the past where substantial investment in the cyclical equities market has resulted in unpredictable returns.

Investment pillars

“The introduction of a property portfolio will add to the existing investment pillars which will allow for diversification of risks and provide predictable long term returns,” said Mr Mike du Toit, the regional managing director for Liberty Africa.

Mr du Toit is a former managing director of the then Stanbic Bank in Kenya.

Mr du Toit said they will diversify to retail commercial properties, industrial properties and unit management, a practice which Liberty Group has honed in the other markets.

For instance, the famous Sun City Resort in South Africa is owned by Liberty Insurance.

Mr du Toit said Liberty would bring its proven risk management practice to its local operations to enhance service.

The new strategy is informed by the recent past where almost all businesses in the CfC Stanbic stable took a hit following the 2008 bearish run of the Nairobi Stock Exchange (NSE).

In its first half year result, the group recorded an impairment of Sh285 million compared to Sh1.3 billion suffered last year.

Businesses under the CfC Stanbic Holdings include CfC Stanbic Bank, CfC Life, Heritage Insurance, Stanbic Investment Management Services and CfC Stanbic Financial Services

The merger between CfC Holdings and Stanbic Bank resulted in the formation of CfC Stanbic Holdings.

The demerger will see the retention of the commercial banking entity CfC Stanbic Bank and the brokerage arm— the CfC Stanbic Financial Services under CfC Stanbic Holdings.

CfC Insurance Holdings will take over CfC Life, Heritage Insurance and the Stanbic Investment Management Services.

Though the various entities under the CfCIH will continue with their operations, Liberty Insurance will oversee the overall management alongside operations in Tanzania and Uganda.