The Kenya Pension Fund Investment Consortium (KEPFIC) has identified infrastructure and alternative investments worth approximately Ksh. 16 billion to venture in this year. This is in line with its drive for diversification of local pension portfolios and the need for greater private infrastructure funding.
The Consortium currently has 24 pension schemes with a portfolio of approximately Ksh. 500 billion in aggregate seeking to invest in infrastructure, energy, and other alternative assets. Among the projects shortlisted by the consortium is a 143 kilometres road project in Northern Kenya under the Kenya Road Annuity Program. KEPFIC members are seeking to invest Ksh. 2 billion into the project via an upcoming bond issuance.
Recent provisions in the Retirement Benefits Authority investment guidelines allows pension funds to invest up to 10% of their assets into infrastructure. This is expected to effectively unlock over Ksh. 140 billion into the asset class, with KEPFIC looking at evaluating public private partnerships opportunities in the transport, energy and affordable housing sectors.
KEPFIC is supported by the U.S. Government through USAID’s Kenya Investment Mechanism, Power Africa, the World Bank Group, and MiDA Advisors (in partnership with USAID INVEST). The consortium provides an opportunity for beneficial collaboration between Kenyan and American pension funds and other institutional investors.
KEPFIC Secretariat, Ngatia Kirungie, had this to say at a past industry conference, “Our member funds are seeking profitable and diversified investment opportunities for optimal returns for their members and retirees, and while pension funds have traditionally invested in government securities and listed equities, infrastructure investments remain an untapped, yet lucrative and impactful opportunity. We are working to make this a reality and are encouraged by the pension fund response towards infrastructure and alternative investments.”