Kenyan Fund Managers Flock to Offshore Assets Amid Liquid Market Appeal

Strategic Insights -

Kenyan fund managers have witnessed a remarkable surge in investments in offshore assets, such as foreign company stocks, gold, and exchange-traded funds (ETFs), as they seek higher returns and easier entry and exit prospects. The value of listed offshore securities held by collective investment schemes skyrocketed by 161.1 percent in three months to June 2025, reaching Sh50.2 billion, from Sh19.2 billion in March, according to data from the Capital Markets Authority (CMA). This shift towards offshore investments has led to the emergence of multi-asset special funds, which primarily focus on this asset class. Fund managers attribute the increased allocations to offshore investments due to the higher liquidity and capacity for larger trades on offshore markets compared to local markets.

Key Takeaways:

  • The value of listed offshore securities held by collective investment schemes increased by 161.1 percent in three months to June 2025, reaching Sh50.2 billion.
  • This marked a significant surge from Sh19.2 billion in March, highlighting the growing appeal of offshore assets to Kenyan fund managers.
  • Fund managers cited the higher liquidity and capacity for larger trades on offshore markets as the primary reasons for the rise in offshore investments.
  • The number of licensed offshore funds by the CMA has been on the rise over recent months, signaling the underlying drive for offshore investments.
  • The emergence of multi-asset special funds with a focus on offshore investments has been notable, with the CMA approving the establishment of several new funds in the quarter ended June.
  • These funds include the Kibaba Special Multi-Asset fund, the ALA Multi-Asset Special Fund, and the VCG Offshore Opportunities Special Funds Umbrella.
  • Offshore listed investments account for approximately eight percent of unit trusts' assets, indicating a growing preference for international investments.

Statistics:

  • - The value of listed offshore securities held by collective investment schemes increased by Sh30.9 billion in three months to June 2025.
  • The number of licensed offshore funds by the CMA has been on the rise, with several new funds approved in recent months.
  • The emergence of multi-asset special funds with a focus on offshore investments has been notable, with several new funds established in the quarter ended June.
  • Offshore listed investments account for approximately eight percent of unit trusts' assets.
  • Treasury bills and bonds remain the most popular asset class with an asset base of Sh244.1 billion or a 41 percent proportion.
  • Investments in commercial banks' fixed deposits rose by the second-fastest rate to reach an asset base of Sh210.4 billion in June from Sh146.2 billion in the prior quarter.

Sources:

  • Capital Markets Authority (CMA)
  • Etica Capital co-founder Kenneth Maina
  • Nairobi Securities Exchange (NSE)