Stanlib- ICEA Lion Acquisition

Stanlib Kenya has lost Ksh. 75 billion worth of client funds through withdrawals following the announcement of its acquisition by fund manager ICEA Lion in November 2019.

Stanlib’s parent holding company, Liberty Holdings, disclosed the outflows which represent over half the REIT manager’s assets under management (AUM).

The Liberty holdings disclosure reveals the quick response by investors. In a trading update, the firm states that Stanlib’s customers discontinued the asset manager’s mandate on funds worth Ksh. 75 billion as of December 31st, 2019.

Liberty further said that the reduction in assets under management in the Kenya and Uganda fund management businesses that are the subject of the acquisition are consistent with its decision to exit asset management in those regions.

The outflows which have significantly cut the amount of funds under management for Stanlib, from an estimated Ksh. 135 billion to Ksh. 60 billion is expected to influence the deal size of the transaction between Stanlib and ICEA Lion which is due for completion in June.

According to Business Daily, some of the clients who left Stanlib joined ICEA while the rest departed to other fund managers. The clients acted on their right to withdraw or retain their holdings in the fund.

The transaction was a loss cutting measure for Liberty which has been exposed to the loss-making behaviour of Stanlib in recent years.

Completion of the transaction will make ICEA the second largest asset manager after Sanlam, with an asset pool of over Ksh. 200 billion. Stanlib runs Kenya’s first listed property fund, Fahari-I Reit.

Announcing the acquisition in November, 2019, the Stanlib said “in the meantime, the unitholders and the public are advised to exercise due caution when dealing in the securities of the REIT until further announcements are made.”