According to Knight Frank’s Wealth Report Attitudes Survey 2020, two-thirds of the wealth managers in Kenya reported that their clients increased their private equity investments in 2019.
This jump in investment to support the growth of Kenya’s innovative young businesses.
The number of Kenyan billionaires worth over KSh3 billion currently is at 42 and it is expected to grow to 48 in the next five years.
Ben Woodhams, Managing Director Knight Frank Kenya said: “All the results of The Wealth Report Attitudes Survey 2020 for Kenya point to a sharp rise in social and environmental awareness by the country’s wealthy and super-wealthy, reflected almost immediately in their investment strategies and behaviours.”
The shift coincided with a general move in investments towards lower-risk holdings, with Kenya’s wealthy increasing their holdings of bonds, gold and cash.
Managers reported the wealthy were most worried about the impact of global economic uncertainty, followed by poor governance, and Brexit, on the basis of which 91% of them reported they were actively changing their investment strategies.
As a result, two-thirds of the wealthy investors had reduced their holdings of now volatile cryptocurrencies, while holding their investments broadly static in property and collectibles, such as works of art.
At the same time, the biggest increases in investments were in equity investments through the stock market and in private equity investments to drive the growth of young businesses.
As the wealthy turned to seeding these new businesses, the survey also found an exceptional rise in interest in action on climate change, with 100% of respondents reporting that their clients were now more interested in climate change as a cause.
This extended to their own consumption, with wealth managers reporting that 27% of Kenya’s richest people would now prefer a hybrid or electric car over a traditional oil-fueled vehicle and that 47% are working actively to reduce their personal carbon footprint.
The managers also reported the heightened interest of the wealthy in supporting education, the arts, and the environment.
Altogether, the surge in philanthropic interest by Kenya’s wealthy marked a stronger rise than in South Africa or most other nations surveyed, but ties with a growing trend across Africa of the continent’s super-rich ‘giving back’ by driving development and improved welfare in their own nations.
Of Africa’s 12 dollar billionaires, five now run their own charitable foundations, while many dollar millionaires are also now running separate philanthropic and impact investment arms.
Andrew Shirley, Editor of The Wealth Report, said: “The rise of impact investment geared towards solving social and environmental problems and creating jobs and livelihoods for marginalised communities has marked a merging of interests across philanthropy and investment, with such businesses having been shown to additionally generate higher financial returns. The attraction of investing in ways that also stimulate the economy and communities is clearly coming into play with this leap forward in local private equity investment.”