Safaricom Staff Pension Fund, Crystal Rivers, Now Eyes Private Equity Deals As Part Of Its Diversification Strategy

Architectural visualization of the Crystal Rivers Mall. Image Courtesy of Behance.

Safaricom’s staff pension fund and owner of flagship Crystal Rivers mixed use development in Athi River, has sets its sights on private equity investments over the next two years as it moves to diversify its asset portfolio. In the past years, Kenyan pension funds have been shifting their assets from the country’s stock markets into real estate investments, where returns are running at more than 20% a year.

Conveniently situated on the busy Mombasa Road, 1.2 Kms past the Mombasa/ Kitengela Roads interchange, Athi River, Machakos County, the Safaricom Mall (Crystal Rivers) and Gated Community is a “Live, Work n Play” development by Safaricom Staff Pension Scheme. The ground breaking was done in June 2015 with the mall opening its doors in December 2017, Phase I (all Townhouses and 120 apartments) will be done in June 2018 and Phase II (140 apartments) in December 2018.

Architectural visualization of the Crystal Rivers Mall. Image Courtesy of Behance.

Private equity investments, which are long term like real estate, will also offer attractive and stable returns for the over 5,000 members of the scheme, according to Chairman Joseph Ogutu.

“The board strongly believes the P.E class will offer the scheme additional diversification opportunities as well as unlock the potential returns that this asset class has to offer. Indeed, our aim is to position the scheme as a major investor in the private equity and alternative investments asset classes,” said Ogutu who also serves as the Safaricom Plc Director of Strategy and Innovation.

Ogutu was speaking when he addressed Safaricom Pension Scheme members during their 2018 Annual General Meeting held at Crystal Rivers, the KShs. 4.3B flagship commercial and residential development situated after the Athi River interchange off Mombasa Road in Mavoko Sub County, Machakos County.

In the year under review, the scheme reported that despite a challenging economic environment, net assets increased by 26% from KShs. 8.5B to KShs. 10.7B, generating an impressive net return of 14.1%.

Ogutu observed that if the Scheme’s Property portfolio were included, the overall return from its assets would be 22.3% – well above the industry average. He noted the overall pension industry weighted average performance for year 2017 was 18.5% for Schemes of similar size to that of Safaricom Staff Pension Scheme.

He announced that the Crystal Rivers Mall was now 96 per cent complete and that some of the tenants has already commenced fitting out their respective stores. “We have seen an influx of technology brands including Tecno and Samsung as well as hospitality brands including Java securing space as they position themselves for the burgeoning Mavoko sub county population,” said Ogutu.

We expect the Mall to commence operations later this year as well as handing over the first batch of homes to our buyers. Despite the challenges commonly associated with property development, I am satisfied with the progress made so far and look forward to the completion of this project and the eventual roaring to life of Crystal Rivers,” noted Ogutu.