The National Social Security Fund (NSSF) pulled Sh33.6 billion in assets from fund managers that run part of its portfolio in the six months ended December 2023, according to new disclosures.
The increased in-house investments resulted in a hit to the portfolio of NSSF assets managed by African Alliance Kenya Investment Bank Limited, an external manager to the fund, to Sh21.1 billion from Sh46.4 billion in June 2023.
The investment bank closed the year with total assets under management valued at Sh27.21 billion or a respective 2.19 percent of the industry’s market share. Data from the Retirement Benefits Authority (RBA) shows the State fund’s internally managed assets increased to Sh80.25 billion from Sh46.61 billion in June 2023.
Meanwhile, the externally managed funds decreased by Sh13.7 billion to Sh247.86 billion from Sh261.65 billion over the same period.
NSSF, the largest pension fund in Kenya has some of its assets managed by contracted fund managers with the balance being invested in-house.
During the six months to December 2023, total investments held by NSSF increased by Sh19.85 billion to stand at Sh328.11 billion from Sh308.26 billion.
All other NSSF external managers grew their respective shares of the fund’s assets including Gen Africa Asset Managers, Sanlam Investment, Old Mutual, Co-op Trust and CIC Asset Management Limited who closed the year with a combined asset base of Sh226.5 billion of the State’s pension portfolio.
NSSF in-house invested assets remained mostly invested in government securities signifying the pension fund’s conservative stance.
“The overall NSSF portfolio is heavily invested in government securities representing 66.31 percent of the total assets. This was followed by quoted equities and immovable property at 15.53 percent and 12.23 percent respectively,” the RBA noted.
Of the Sh80.25 billion in internally invested funds, NSSF had Sh22.67 billion in government securities, Sh38.47 billion in property, Sh4.36 billion in quoted equities and Sh1.28 billion in fixed deposits. The balance of Sh13.25 billion was held in property, plant and equipment, intangible assets, inventories, staff mortgage scheme, accrued income, trade and other receivables and staff car loans.
NSSF invests member contributions in compliance with the Retirement Benefits Act investment guidelines and the fund’s investment policy. The apportion of assets to external fund managers is for instance geared at generating higher returns to members.
“To safeguard members’ funds, NSSF has enlisted the services of independent custodians for safe keeping of assets and independent fund managers t with the objective of maximising members returns,” NSSF notes.
NSSF assets under management rose by 6.4 percent across the entirety of 2023 from a growth rate of 6.1 percent in 2022, despite the implementation of higher member contributions from the enactment of the 2013 NSSF Act.
