Capital Markets

ICEA spends Sh263m to buy rival Stanlib’s Kenya, Uganda units


A Stanlib investors briefing in Nairobi on March 29, 2018. PHOTO | SALATON NJAU | NMG

ICEA Lion Asset Management Limited (ILAM) has paid 43 million rands (Sh263 million) to purchase rival fund manager Stanlib’s operations in Kenya and Uganda.

The transaction was completed in June. Johannesburg-based insurance group Liberty Holdings, the parent firm of Stanlib, says it did not make a profit or loss in the deal, which is part of a strategy to exit struggling businesses.

“By June 30, 2020, effectively the entire business operations in Stanlib Kenya and Stanlib Uganda Limited, encompassing segregated mandates, REIT (real estate investment trust) management, unit trust management and umbrella fund administration have either been transferred to the ILAM or a new asset manager designated by the client,” Liberty says in a trading update.

“The sale was concluded at the carrying value reflected as of December 31, 2019, and therefore no profit or loss on sale was realised.”

In separate disclosures, Liberty valued Stanlib’s Kenya and Uganda business at R33 million (Sh202 million) and R10 million (Sh61 million) respectively as of the referenced period.

Stanlib Kenya had incurred significant operating losses and the cost of investing in the subsidiary had been impaired, the multinational said ahead of the conclusion of the sale.

The change of control at Stanlib saw clients transfer R10 billion (Sh61 billion) in assets to ILAM and other fund managers.

“Total group assets under management declined…due mainly to the exit of asset management operations in Stanlib Kenya and Uganda and the associated transfers of mandates to other external managers of R10 billion (Sh61 billion),” Liberty said.

Clients were notified of the pending transaction and were given an option of leaving or remaining with ILAM, the new owner of the business.

In seeking to cut losses, the multinational was looking for a firm that could purchase Stanlib within a short timeframe.

ILAM, owned by the Philip Ndegwa family, stepped in to buy the company in a transaction that has scaled up its asset management arm besides launching it into the listed property fund business.

The deal is estimated to have lifted ILAM’s asset pool to more than Sh200 billion, placing it first or second in the rankings of fund managers in Kenya.

The asset manager also inherited the role of promoter and manager of the Nairobi Securities Exchange-listed ILAM Fahari I-Reit from Stanlib Kenya.

The property firm, whose net earnings rose 12.5 per cent to Sh86 million in the half-year ended June, rebranded from its previous name Stanlib Fahari I-Reit.