Funds managed by British American Assets Managers Limited (BAAM) halved in 2021 after the firm was dropped by the National Social Security Fund from the list of investment managers contracted to oversee its portfolio.
BAAM’s asset pool dropped from Sh154.6 billion in December 2020 to Sh79.1 billion last year, the latest industry data from the Retirement Benefits Authority (RBA) shows.
The National Social Security Fund (NSSF) 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.
The State-controlled fund is therefore a big contributor of business to the private funds, which earn management fees for their services. In 2020, NSSF spent Sh355.7 million in fund manager fees.
“The assets managed by BAAM dropped drastically from June 2021 due to loss of business by NSSF where it was managing over Sh82.28 billion in December 2020….Sanlam Investment East Africa Ltd and CIC Assets Management Ltd join the list of fund managers managing NSSF funds after the exit of the BAAM,” said RBA in its industry report for December 2021.
BAAM was NSSF’s largest external fund manager until the reassignment of the assets.
In November, NSSF managing trustee Anthony Omerikwa said that the change came about after normal procurement processes were carried out for management services.
NSSF’s assets are mainly deployed in government securities, listed shares, and a portfolio of prime land and property in Nairobi and other urban centres.
Following its acquisition of part of the NSSF business from BAAM, Sanlam was able to regain its position as the leading private fund manager with assets under management of Sh288.8 billion, ahead of GenAfrica Asset Manager at Sh270.4 billion.
In 2020, GenAfrica led with assets worth Sh237.7 billion, with Sanlam at Sh227 billion.
Overall, the total assets of the pensions industry rose by 10.6 percent in 2021 to Sh1.547 trillion in December 2021, buoyed by fixed deposit investments and higher valuations of equities.
Government securities accounted for the largest share of assets under management at 45.7 percent, followed by guaranteed funds at 16.79 percent.
Quoted equities and immovable property accounted for 16.45 percent of assets at the end of the year.