The Capital Markets Authority (CMA) has granted approvals to several market players for the establishment of new collective investment schemes and sub-funds, in a move aimed at deepening Kenya’s capital markets and enhancing product diversity for investors. This latest round of approvals reflects the growing sophistication of Kenya’s investment landscape and increasing investor appetite for diversified financial products.
Sanlam Investments East Africa has received approval to establish a new sub-fund under its existing structure, the Sanlam Special GBP Fixed Income Fund. This unit portfolio will be denominated in Great Britain Pounds (GBP), providing investors with exposure to fixed income securities in foreign currency—a strategic move that addresses growing demand for currency-diversified investment options among Kenyan investors.
Build the future you deserve. Get started with our top-tier Online courses: ACCA, HESI A2, ATI TEAS 7, HESI EXIT, NCLEX-RN, NCLEX-PN, and Financial Literacy. Let Serrari Ed guide your path to success. Enroll today.
New Market Entrants Expand Investment Landscape
In a separate development, ALA Capital Limited has been approved to register the comprehensive ALA Capital Collective Investment Scheme (ALA CIS), comprising six diverse sub-funds: ALA Balanced Fund, ALA Multi-Asset Special Fund, ALA Equity Fund, ALA Fixed Income (KES) Fund, ALA Money Market Fund (USD), and ALA Money Market Fund (KES). This diversified offering provides investors with options across different asset classes and risk profiles.
Additionally, VCG Asset Management Limited has received approval to register three funds under the VCG Offshore Opportunities Special Funds umbrella. These include the VCG Offshore Money Market Fund (KES), VCG Offshore Money Market Special Fund (USD), and VCG Offshore Fixed Income Special Fund (KES), further expanding offshore investment opportunities for Kenyan investors.
Remarkable Growth in Assets Under Management
The CMA Chief Executive Officer, FCPA Wyckliffe Shamiah, welcomed the approvals, noting the continued growth in demand for collective investment schemes, which have now surpassed KSh 500 billion in total assets under management. This represents a significant milestone for Kenya’s investment management industry and demonstrates growing investor confidence in professionally managed funds.
“These approvals reflect growing investor confidence and increased appetite for diversified investment options, including foreign currency-denominated and offshore funds,” said Mr. Shamiah. The Authority remains committed to supporting the development of innovative capital markets products that enhance investor choice and contribute to economic growth.
Historical Context and Market Evolution
The growth in collective investment schemes represents a remarkable transformation of Kenya’s investment landscape. According to CMA’s quarterly reports, assets under management by CIS have grown steadily over the past six years, from KSh 56.6 billion as of March 31, 2018, to KSh 254.06 billion as of June 2024, before reaching the current milestone of over KSh 500 billion.
This exponential growth has been driven by several factors, including increased investor education, regulatory improvements, and the introduction of innovative products that cater to different risk appetites and investment objectives. Money Market Funds have been particularly popular, accounting for KSh 171 billion or 67.4% of all funds under management by collective investment schemes as of June 2024.
Currency Diversification Trend Gains Momentum
The approval of foreign currency-denominated funds reflects a growing trend among Kenyan investors seeking currency diversification to hedge against exchange rate fluctuations and access international investment opportunities. Dollar funds have continued to grow both in popularity and value, registering a growth of 260% between March 2023 (KSh 6.6 billion) and June 2024 (KSh 23.8 billion).
Sanlam Investments East Africa, as part of the broader Sanlam Group operating in more than 30 African countries, is well-positioned to offer sophisticated foreign currency investment solutions. The company manages over KSh 423 billion in assets under management as of December 2021, making it one of the largest fund managers in East Africa.
Expanding Fund Management Industry
Kenya’s fund management industry has witnessed significant expansion, with the number of licensed fund managers reaching 43 as of February 2025. The CMA has been actively licensing new fund managers to meet growing demand, including recent approvals for Tradiam Investments Services Limited and Kenya Alliance Asset Management Limited.
This growth in licensed fund managers has created healthy competition in the market, leading to improved service delivery, innovative product development, and competitive pricing for investors. The increased number of market participants has also contributed to greater market depth and liquidity.
Regulatory Framework Supporting Innovation
The approvals operate within Kenya’s comprehensive regulatory framework for collective investment schemes, governed by the Capital Markets (Collective Investment Schemes) Regulations 2023. This regulatory structure ensures investor protection while encouraging innovation and market development.
The regulatory framework requires that client assets are held by custodians in segregated accounts, providing additional security for investors. The CMA’s approach balances prudential regulation with market development objectives, creating an environment conducive to both investor protection and market growth.
One decision can change your entire career. Take that step with our Online courses in ACCA, HESI A2, ATI TEAS 7, HESI EXIT, NCLEX-RN, NCLEX-PN, and Financial Literacy. Join Serrari Ed and start building your brighter future today.
Market Segmentation and Product Diversity
The newly approved funds span various market segments and investment strategies:
Fixed Income Funds: The Sanlam Special GBP Fixed Income Fund and VCG Offshore Fixed Income Special Fund (KES) provide investors with exposure to debt securities, offering relatively stable income streams with varying risk profiles depending on the underlying securities and currency exposure.
Money Market Funds: The ALA Money Market Funds in both USD and KES, along with VCG’s offshore money market offerings, target investors seeking capital preservation with competitive short-term returns. These funds typically invest in government securities, commercial paper, and bank deposits.
Equity and Balanced Funds: ALA’s equity and balanced fund options provide exposure to stock markets and mixed asset portfolios, catering to investors with higher risk tolerance seeking capital appreciation and long-term growth.
Multi-Asset and Special Funds: The ALA Multi-Asset Special Fund represents the growing trend toward sophisticated investment strategies that combine different asset classes to optimize risk-adjusted returns.
Investor Access and Participation Growth
The number of investors participating in collective investment schemes has grown remarkably, with a 605% increase between March 2021 (172,000 investors) and June 2024. This dramatic growth reflects increased financial literacy, improved market access, and growing confidence in professionally managed investment products.
The expansion of investment options through mobile platforms and digital channels has made collective investment schemes more accessible to retail investors, contributing to the democratization of investment opportunities in Kenya.
Regional and International Investment Opportunities
The approval of offshore funds and foreign currency-denominated products aligns with growing investor interest in regional and international diversification. As Kenya’s economy becomes increasingly integrated with global markets, investors are seeking opportunities to participate in broader economic growth while managing domestic market concentration risks.
VCG Asset Management’s offshore opportunities funds, in particular, provide Kenyan investors with access to international markets while remaining within the domestic regulatory framework. This approach offers the benefits of international diversification without the complexities of direct foreign investment.
Technology and Digital Innovation
The growth of the collective investment schemes sector has been supported by technological innovations that improve investor access and experience. Digital platforms, mobile applications, and online portals have made it easier for investors to research, purchase, and monitor their investments.
Sanlam Investments East Africa, for example, has developed sophisticated digital platforms including mobile apps and client portals that allow investors to view account balances, access statements, make additional investments, and request withdrawals conveniently.
Economic Impact and Capital Formation
The growth in collective investment schemes contributes significantly to Kenya’s capital formation and economic development. By mobilizing savings from a large number of small investors, these funds provide substantial capital for investment in government securities, corporate bonds, and equity markets.
The KSh 500 billion in assets under management represents a significant pool of domestic capital that supports economic growth through government financing, corporate funding, and market liquidity provision. This domestic capital mobilization reduces dependence on foreign financing and provides a stable funding base for economic development.
Regulatory Oversight and Investor Protection
The CMA’s regulatory approach emphasizes investor protection while promoting market development. Key regulatory features include:
Custodial Requirements: All client assets must be held by licensed custodians in segregated accounts, protecting investor funds from operational risks at fund management companies.
Disclosure Requirements: Fund managers must provide comprehensive information about investment objectives, risks, fees, and performance to enable informed investor decision-making.
Prudential Standards: Capital adequacy requirements and operational standards ensure fund managers maintain sufficient resources and capabilities to serve investor interests.
Performance Monitoring: Regular reporting requirements enable the CMA to monitor fund performance and ensure compliance with investment mandates and regulatory requirements.
Market Outlook and Future Developments
The continued approval of new collective investment schemes reflects the CMA’s commitment to market development and investor choice expansion. The authority has indicated its intention to continue supporting innovative products that meet investor needs while maintaining appropriate regulatory oversight.
Future developments in the sector are likely to include:
- Expanded use of technology for investor access and service delivery
- Development of specialized products targeting specific investor segments
- Integration with regional markets through cross-border investment opportunities
- Enhancement of environmental, social, and governance (ESG) investment options
- Continued growth in assets under management as investor participation increases
Conclusion: A Maturing Investment Landscape
The approval of new collective investment schemes and sub-funds by the CMA represents a significant milestone in Kenya’s capital markets development. With assets under management surpassing KSh 500 billion and a growing number of sophisticated investment options, Kenya’s collective investment schemes sector has evolved into a critical component of the country’s financial system.
The diversity of newly approved funds—spanning different asset classes, currencies, and risk profiles—demonstrates the market’s maturation and the increasing sophistication of Kenyan investors. As the sector continues to grow, it will play an increasingly important role in mobilizing domestic savings, supporting economic development, and providing Kenyan investors with access to global investment opportunities.
The CMA’s balanced approach to regulation—promoting innovation while ensuring investor protection—has created an environment that supports healthy market development. As more investors gain access to professionally managed investment products, the collective investment schemes sector will continue contributing to financial inclusion and wealth creation in Kenya.
Background Information on the Capital Markets Authority
The Capital Markets Authority (CMA) was established in 1989 as a statutory agency under the Capital Markets Act Cap 485A. The authority is charged with the prime responsibility of both regulating and developing orderly, fair, and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence.
CMA also regulates commodity markets and online forex trading. The regulatory functions of the Authority include licensing and supervising all capital market intermediaries, ensuring compliance with legal and regulatory frameworks, regulating public offers of securities, promoting market development through research, reviewing legal frameworks, promoting investor education, and protecting investor interests.
For more information about collective investment schemes and other capital market products, investors can visit the CMA website or consult with licensed investment advisors and fund managers.
Ready to take your career to the next level? Join our Online courses: ACCA, HESI A2, ATI TEAS 7 , HESI EXIT , NCLEX – RN and NCLEX – PN, Financial Literacy!🌟 Dive into a world of opportunities and empower yourself for success. Explore more at Serrari Ed and start your exciting journey today! ✨
Track GDP, Inflation and Central Bank rates for top African markets with Serrari’s comparator tool.
See today’s Treasury bonds and Money market funds movement across financial service providers in Kenya, using Serrari’s comparator tools.
Photo source: Google
By: Montel Kamau
Serrari Financial Analyst
14th July, 2025
Article, Financial and News Disclaimer
The Value of a Financial Advisor
While this article offers valuable insights, it is essential to recognize that personal finance can be highly complex and unique to each individual. A financial advisor provides professional expertise and personalized guidance to help you make well-informed decisions tailored to your specific circumstances and goals.
Beyond offering knowledge, a financial advisor serves as a trusted partner to help you stay disciplined, avoid common pitfalls, and remain focused on your long-term objectives. Their perspective and experience can complement your own efforts, enhancing your financial well-being and ensuring a more confident approach to managing your finances.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Readers are encouraged to consult a licensed financial advisor to obtain guidance specific to their financial situation.
Article and News Disclaimer
The information provided on www.serrarigroup.com is for general informational purposes only. While we strive to keep the information up to date and accurate, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
www.serrarigroup.com is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information on the website is provided on an as-is basis, with no guarantee of completeness, accuracy, timeliness, or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
In no event will www.serrarigroup.com be liable to you or anyone else for any decision made or action taken in reliance on the information provided on the website or for any consequential, special, or similar damages, even if advised of the possibility of such damages.
The articles, news, and information presented on www.serrarigroup.com reflect the opinions of the respective authors and contributors and do not necessarily represent the views of the website or its management. Any views or opinions expressed are solely those of the individual authors and do not represent the website's views or opinions as a whole.
The content on www.serrarigroup.com may include links to external websites, which are provided for convenience and informational purposes only. We have no control over the nature, content, and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorsement of the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, www.serrarigroup.com takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
Please note that laws, regulations, and information can change rapidly, and we advise you to conduct further research and seek professional advice when necessary.
By using www.serrarigroup.com, you agree to this disclaimer and its terms. If you do not agree with this disclaimer, please do not use the website.
www.serrarigroup.com, reserves the right to update, modify, or remove any part of this disclaimer without prior notice. It is your responsibility to review this disclaimer periodically for changes.
Serrari Group 2025
