Britam Asset Managers is the Asset Management subsidiary of Britam Holdings PLC. The Company was incorporated in April 2004 and started operations in 2006 to fill a gap in quality Fund Management and Investment Advisory services to individual and institutional investors. The Company is licensed as a Fund Manager by both the Capital Markets Authority (CMA) and the Retirement Benefits Authority (RBA) in Kenya. Three years ago the business has been through a lot of turmoil with the exit of key staff, but within the time the business profitability has doubled.
“We have since grown to Ksh126 billion in assets under management at November 2017, we are proud to say out of Ksh 126 billion only about 15 per cent is from the Mother insurance company. About a 1⁄4 of our assets are retail assets that give us 10 times the fees of our institutional space; in addition the superior distribution in collaboration with the insurance company has really meant a lot that in terms of diversity, product mix and spread of profile of investor has proved to be very beneficial to the business.” Kenneth Kaniu CEO Britam
In 2016, the company reported revenue of Ksh975.9 million compared to Ksh 689.7 million in 2015. Profit before tax stood at Ksh 374.8 million compared to Ksh 179.9 million in 2015.
“That in my view comprises of close to half of the industry profitability and puts us in a clear number one position in as far as revenue and profits are concerned, this is attributed to
product mix and margin splits and so and so forth. Our investment returns have been superb, clients choose you of the back of investment returns, innovation and outlook.” says Mr. Kaniu
Mr. Kaniu admits the uptake of the retail market is not as strong as it should be and more e ort should be added to raise awareness and ensure people’s savings and retirements keep pace with inflation or outpace it. He adds that the equities and bond markets are disseminated which proves that people prefer to invest directly instead of using intermediaries. He continues to say that, distribution has been a huge challenge for the general asset management industry in East Africa.
“For us the reason we have been doing fairly well and we are now managing Ksh30 billion in retail assets under management has been our distribution since we have partnered up with the insurance company with 3000 financial advisers across the country and they active sell asset management.” says Mr. Kaniu
Britam Asset Managers have been directing consecutive e orts towards growing the retail market by servicing their investors virtually, this has been done by setting unit trusts on the mobile phone, the company has gone ahead as to link up the short code to the IPRS(Integrated Population Registration System) to be able to verify national identification numbers. The company has also linked up with Safaricom to have an M-Pesa in-session payment sending funds to the custodian bank, this whole process takes10 minutes with a minimum of Ksh 1000.
In terms of the scope of investment opportunities available, Mr. Kaniu believes that demand exceeds supply of investment industry. He goes ahead to give an example of the Pension Fund industry that has tripled in size over the last 67 years however the capital markets have not kept in pace with this, where there only 55 companies listed on the NSE and the number has been stagnant for the last 15 years. He says there is need to deploy money into the stock market, which calls for asset managers to innovate and come up with investment opportunities to deploy the money effectively, hence the rise of alternative investments.
The country has been going through uncertain times especially with the on goings in the political arena, this has inhibited investment opportunities with investors taking a ‘wait and see’ approach. Mr. Kaniu advice to investors is regardless of the environment, investors stick should the investment strategies and take a tactical approach to suit the environment.
“when you look with the benefit of hind sight 3-6 years from now, it will be the decisions made now that will impact what your investment portfolio, returns and structure looks like at that time. One must not lose sight of the investment goals since they will not change regardless of the political environment” adds Mr. Kaniu
Despite the uncertainties along with never ending electioneering period this year, Mr. Kaniu says 2017 has been quite reasonable in terms of investment growth with assets under management up by 20 per cent, he adds that profitability is likely to be stable relative to last year, but the investment returns have been very strong.
“Surprisingly this year even with the on goings in the political environment, the stock market is up almost to 20 per cent, inflation is coming down, interest rates are stable, and the currency is again stable. That is if you compare this year with the last 2 years where the stock market has been down 20 per cent each year. May be we should have elections every year,” he laughs.
Five years from now Britam Asset managers has set up a strategy up to the year 2020 in conjunction with South Africa’s Genesis Analytics and Palladium Company a managing consulting business based in Spain.
“I see the business having more brand recognition, more assets, more diversity in depth as far as invest product is concerned finally risk diversification. We see ourselves acting as a good anchor for the Britam Group.” he concludes.
– By Nelius Kanyingi