Capital Markets

Retirement schemes eye Sh25bn big project deals

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Zamara chief executive Sundeep Raichura. FILE PHOTO | NMG

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Summary

  • Zamara chief executive Sundeep Raichura, who is the chairman of KEPFIC, said they are targeting American, UK and South African pension funds for the deals that will chase road, bridges, water, hospital, student and affordable housing deals by the government.
  • The pension funds especially want to leverage their long-term funding model for the projects through the government’s public private partnership (PPP) model.

Kenyan retirement schemes will partner with global pension funds to finance Sh25 billion infrastructure deals over the next five years.

Fifteen local pension funds have come together to form a consortium- Kenya Pension Fund Investment Consortium (KEPFIC)- where each will allocate five percent of their assets into infrastructure and other alternative asset classes and through co-investment with the global funds.

Zamara chief executive Sundeep Raichura, who is the chairman of KEPFIC, said they are targeting American, UK and South African pension funds for the deals that will chase road, bridges, water, hospital, student and affordable housing deals by the government.

The pension funds especially want to leverage their long-term funding model for the projects through the government’s public private partnership (PPP) model.

“We have formalised partnership with MiDA Advisors which mobilises investments in America and we are going to do the same with South Africa and UK, which will make up part of the Sh25 billion. Global funds will only come in if local funds invest,” Mr Raichura said.

Local pension funds, the World Bank and the US have been working over the past few years to introduce infrastructure as an invest-able asset class to Kenyan institutional investors.

“Recent changes to the Retirement Benefits Authority guidelines allow pension funds in Kenya to invest up to 10 percent of their assets into infrastructure, potentially unlocking over Sh100 billion,” said US Ambassador to Kenya Kyle McCarter following the formal launch of KEPFIC on Wednesday.

Currently, 15 pension funds including Kenya Revenue Authority Staff Pension Scheme, Safaricom Staff Pension Scheme, KenGen Staff Retirement Benefits Scheme, and Kenya Pipeline Company Retirement Benefits Scheme and Zamara are members of the consortium.

“We expect to grow to 25 members in the next few months with an asset base of over Sh400 billion and eventually be open to even smaller pension funds as well who want to pool their assets to achieve scale,” said Mr Raichura.