Kenya’s Acorn Holdings Africa and the Kenya Mortgage Refinance Company (KMRC) recently won investments from members of the Kenya Pension Funds Investment Consortium (KEPFIC), a group of funds that collaborate to invest in alternative assets. In particular, KEPFIC pension funds placed USD 50 million in KMRC, a provider of wholesale mortgage loans and refinancing, through an issuance of 7-year bonds that promise returns of 12.5 percent. This funding targets housing options for people with low and moderate incomes.
KEPFIC members invested an additional USD 11 million in a student housing project of Acorn Holdings, a property manager and developer, through a real estate investment trust offering returns of 18.3 percent.
Acorn Holdings has 270 employees and manages 13,000 rental units according to undated information on its website. This includes two brands of student rental housing properties in the Nairobi area, Qejani and Qwetu. The organization also: (1) develops new housing projects; (2) offers two real estate investment trusts for retail and institutional investors; and (3) sells tradable real estate securities through its Vuka membership program, which carries a minimum initiation fee of KES 499 (USD 3.70) and a maximum annual investment volume of KES 2 million (USD 14,700).
KMRC funds primary mortgage lenders, supporting traditional mortgages as well as a lower-cost option with a loan cap of KES 8 million (USD 57,800) for those with monthly incomes up to KES 150,000 (USD 1,090). During 2022, the company reported net interest income of KES 1.3 billion (USD 9.5 million) on a gross loan portfolio of KES 6.8 billion (USD 49 million) and total assets of KES 21 billion (USD 155 million). The Republic of Kenya owns a 25-percent stake in the company.
Incorporated in Kenya in 2018, KEPFIC provides technical assistance to its member funds, which manage aggregate assets of USD 5 billion. The consortium was created with the support of the Joint Capital Market Program (J-CAP), which provides technical assistance and other support to organizations that conduct infrastructure and housing development in Africa and Asia as well as Peru. J-CAP is jointly managed by two members of the World Bank Group, the International Finance Corporation and the World Bank.
By Rohit Dayanand, Research Associate
Sources and Additional Resources
IFC press release
https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/news+and+events/news/pooling-pensions-in-kenya
KMRC press release on partnership with International Finance Corporation, World Bank
https://www.kmrc.co.ke/29/kmrc-partners-wb-ifc-expand-affordable-financing/
KMRC homepage
https://www.kmrc.co.ke/
KMRC 2022 financial statement
https://www.kmrc.co.ke/resource/kmrc-financial-statements-2022
Acorn Holdings Africa homepage
https://acornholdingsafrica.com
Qejani homepage
https://qejani.co.ke/
Qwetu homepage
https://qwetu.co.ke/
Vuka homepage
https://vuka.co.ke/
KEPFIC homepage
https://kepfic.co.ke/
KEPFIC 2022 profile
https://kepfic.co.ke/wp-content/uploads/2022/12/KEPFIC-Information-Deck-3.pdf
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