Pension funds invested about Sh200 million in private equity (PE) firms last year, translating to only 0.02 per cent of total assets.
According to Retirement Benefits Authority (RBA), the pension industry total assets under management stood at Sh920 billion as at December 31, 2016.
RBA acting chief executive Nzomo Mutuku on Wednesday said the biggest chunk went to the government securities accounting for 38 per cent of the total investment.
Real estate was at 20 per cent, quoted shares 17 per cent while 15 per cent was in the insurance companies as guaranteed funds. Another five per cent was in corporate bonds issued by private firms, three per cent in banks and one per cent offshore.
“As at December last year, we had very little in this asset class, but the amount we are talking about today is certainly going to increase this figure significantly,” said Mr Mutuku during the PE Fanisi investors briefing in Nairobi.
He said from a regulatory perspective the laws governing the sector are facilitative, but that RBA needs to sensitise people to save for retirement.
In 2015, the Capital Markets Authority allowed pension funds to invest up to 10 per cent of their portfolio in private equity and venture funds.