The Kenya Pension Funds Investment Consortium (KEPFIC) is this year set to mobilize billions in investment from local pension funds for regional opportunities and has made a first-round call for investment proposals from project sponsors and fund managers looking to raise capital.
KEPFIC is a consortium of Kenyan retirement benefit schemes that have come together to make long-term infrastructure and alternative asset investments in the region. According to the Call for Investment Proposals posted on their website, to date, KEPFIC has successfully mobilized over USD 113 million (Ksh16 billion) into alternative assets investments by the Kenyan pension schemes since its inception in 2020.
In a public announcement on the website, KEPFIC Secretariat said the Consortium is looking for bankable projects with suitable returns that support economic development and are backed by strong environmental, social, and governance principles.
“KEPFIC is releasing this Request for Proposals (RFP) to invite investment proposals from project sponsors and fund managers that are looking to raise capital from Kenyan pension funds for regional opportunities,” KEPFIC put in the announcement published on January 10, 2023.
“Investment proposals will be evaluated to ensure they are technically sound, strategically focused, provide appropriate risk adjusted returns, driven by promoters with requisite track record and expertise, and have positive expected ESG impact,” the Call for Investment Proposals adds. The secretariat has set a January 31st deadline for interested parties to submit their proposals.
Traditionally, pension funds have invested in government securities, listed equities, and direct investment but infrastructure investments remain hugely untapped yet profitable and sustainable in the long term. Since 2020, the Retirement Benefits Authority investment guidelines allow pension funds to invest up to 10% of their assets into infrastructure which has effectively unlocked over Ksh 140 billion into the asset class.
Investments into alternative assets such as infrastructure and housing represent an attractive yet underutilized investment opportunity for pension funds as these investments provide competitive returns, portfolio diversification, inflation hedges, and long-term asset-liability matching for pension portfolios. KEPFIC’s strategy is to source a robust investment pipeline for the consideration of its member schemes with the goal of providing them with competitive investment returns and diversification opportunities.
KEPFIC is supported by USAID and the World Bank Group and has further leveraged its mission and established partnerships with offshore pension funds looking for liquid co-investment opportunities in the region. Through this support and co-investment partnerships, KEPFIC aims to mobilize and invest at least USD 250 million (Ksh30 billion) in infrastructure and alternative assets in the near term and provide competitive returns and diversification opportunities to its member funds and partner co-investors.