Summary
- The outflows, representing over half Stanlib assets under management (AUM), have been disclosed by the company’s parent company Liberty Holdings of South Africa.
- The multinational says in a trading update that Stanlib’s “discontinued mandates” stood at R11.1 billion (Sh75 billion) as of December 31, 2019.
Clients of asset manager Stanlib Kenya have withdrawn Sh75 billion ahead of the buyout by rival ICEA Lion Asset Management.
The
outflows, representing over half Stanlib assets under management (AUM),
have been disclosed by the company’s parent company Liberty Holdings of
South Africa.
The multinational says in a trading
update that Stanlib’s “discontinued mandates” stood at R11.1 billion
(Sh75 billion) as of December 31, 2019.
“These outcomes
are consistent with the decision to exit asset management in these
regions,” Liberty said of the assets shrinkage in the Kenya and Uganda
fund management businesses that it is selling.
The outflows are estimated to have reduced Stanlib’s pool of funds to some Sh60 billion from the previous Sh135 billion.
It was not immediately clear what impact, if any, the client
exits will have on the size of cash payment ICEA will make to Stanlib in
the deal expected to be completed June 30, 2020.
A
source familiar with the transaction said some of the clients who left
Stanlib joined ICEA while the rest dispersed to other fund managers.
Clients were notified of the pending transaction and were given an option of leaving or remaining at Stanlib.
Stanlib
has incurred significant operating losses in recent years when it has
also relied on capital injection from its parent company, Liberty said.
In seeking to cut losses, the multinational was looking for a firm that could purchase Stanlib within a short timeframe.
ICEA,
owned by the Philip Ndegwa family, stepped in to buy the company in a
transaction that gives it an opportunity to scale up its asset
management arm besides entering the listed property fund business.
ICEA
is expected to run an asset pool of more than Sh200 billion
post-transaction, placing it first or second in the rankings of fund
managers.
Sanlam Investments East Africa Ltd (SIEAL)
has been the largest asset manager with a portfolio valued at Sh277
billion, according to the latest available industry statistics.
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