NSSF eyes PE investments

The National Social Security Fund (NSSF) has announced plans to invest in private equity firms as it moves to diversify its investment portfolio.

Under the NSSF act, the state owned pension fund can invest up to Sh17.2 billion based on its current asset size.

Speaking during the funds third annual general meeting, NSSF acting Managing Trustee Antony Omerikwa said the move would enable NSSF maximize profits.

“It’s a continuous process and we keep on looking at areas where we can optimize on our profits. We are diversifying our portfolio every other day and looking at areas where our income can grow,” Mr Omerikwa said.

In the 2015/2016 budget, Treasury Cabinet Secretary Henry Rotich introduced clause that pension funds can invest up to 10 percent of their assets in private equity and venture capital funds. With a war chest of Sh172 billion in assets as at the end of June 2016, NSSF has an upper hand in the investment space.

NSSF is in talks with several PE firms on how to make the best returns.

“We are looking at very many private equity firms. We have gone through a rigorous appraisal process of some but we haven’t zeroed in on any so far,” Mr Omerikwa added.

At the same time NSSF is looking to curb wastage to maximize savers returns as half the funds collections go towards administrative costs. Having collected Sh8.4 billion in 2014, NSSF spent Sh4.75 billion to foot salaries and administrative costs.