Ndegwas create largest fund manager in Stanlib buyout

James Ndegwa
Mr James Ndegwa. PHOTO | SALATON NJAU | NMG 

The Philip Ndegwa family is on course to run the biggest fund, managing more than Sh278 billion once it completes the buyout of asset manager Stanlib Kenya.

The family’s ICEA Lion Asset Management has signed an agreement to acquire Stanlib Kenya in a deal whose value is estimated at more than Sh1.5 billion.

Rankings of fund managers as of December 2018 indicate that ICEA and Stanlib, combined, will be in contention to replace Sanlam Investments East Africa Limited (SIEAL) as the largest asset manager.

A survey by pension administrator Zamara shows that SIEAL was managing a total of Sh277 billion as of December 2018 when Stanlib was overseeing Sh135.2 billion.

ICEA, according to a separate source, was running a total of Sh143 billion at the same time.


This means that ICEA and Stanlib were managing Sh278.2 billion combined, slightly higher than SIEAL’s Sh277 billion.

For the Ndegwas, the deal serves to build scale in asset management besides offering an opportunity to enter the listed property fund business.

The transaction, expected to be completed early next year, will also see ICEA inherit from Stanlib the role of managing property fund Stanlib Fahari I-Reit, which is listed on the Nairobi Securities Exchange.

“The transaction is meant to enhance capacity in asset management and offer clients new property investment opportunities,” one of the sources involved in the deal said.

ICEA will earn fees of more than Sh80 million per year to manage the property fund. The transaction has sparked speculation that the Ndegwas could sell some of their buildings to the Reit in exchange for shares.

Others are assuming that the family could also buy out the property fund manager, which is trading at less than half of its net asset value per share of Sh20.2.

The Reit’s shares hit highs of Sh9 on Friday after the deal was announced.

Sources privy to the deal told the Business Daily that ICEA currently has no plans to acquire shares in the Reit.

“Buying or selling shares in the Reit is not part of this transaction,” a source said, adding that current owners including Stanlib (with a 10.2 percent stake) could still sell their holdings to any party in the future.