In a bid to diversify and grow its investment portfolio, Britam Asset Managers has announced its investment of $14m (Ksh1.4 billion) into Everstrong Power Limited, a private equity firm that invests in energy assets in Africa.
In a statement, Britam noted that the funds will be used to buy a stake in the 80MW Heavy Fuel Oil Athi River Power Plant owned by Gulf Energy, one of the top oil and energy players in the region. The power plant was commissioned in 2014 with a 20-year power purchase agreement with Kenya Power.
Through this investment, Britam’s Asset Managers institutional clients will achieve diversification not only across asset classes but also across currencies. This is because the returns from the power plant will be in hard currency, stated Kenneth Kaniu, Chief Executive Officer, Britam Asset Managers.
Britam Asset Managers currently has approximately $1.5billion (Ksh158 billion) in assets under management and invests assets for both institutional and retail clients. Among its institutional clients are Pension Schemes, University Endowment Funds, Insurance Funds and Foundations, which focus on long term assets.
In Kenya, asset allocation for these clients has largely had a bias towards traditional asset classes – equity market, corporate bonds, commercial papers, T-bills, T-Bonds and bank deposits. This explains why overall investment returns have been quite volatile in Kenya.
Through this investment, Britam Asset Managers clients will be able to have more stable and less volatile returns and they will benefit from the diversification this asset provides, added Mr Kaniu.
He also added that through this investment, more local institutional and retail capital could be unlocked to fund infrastructure and energy investments in the region given the long term funding profile of the assets available.
Britam Holdings Limited, previously known by as British-American Investments Company, is a diversified financial services group and is listed on the Nairobi Securities Exchange. The group offers a wide range of financial products and services in insurance, asset management, property, and banking in the African Great Lakes region.