Kenyan Fund Managers Turn to Dollar Assets as Demand for Offshore Investing Surges
A notable portion of this growth has come from products denominated in foreign currency, reflecting growing investor appetite for offshore options amid macroeconomic uncertainty.
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Kenya’s investment industry is rapidly shifting toward dollar-denominated products as more fund managers bet on offshore diversification to attract investors worried about shilling volatility and domestic market stagnation.
This week, CIC Insurance Group became the latest major player to enter the global investment space with the launch of the CIC Global Balanced Special Fund, a U.S. dollar–denominated collective investment scheme that gives local investors access to both domestic and international assets.
The product, managed by CIC Asset Management (CICAM) — a subsidiary of the group — offers exposure to a mix of government securities, global exchange-traded funds (ETFs), equities, and mutual funds. The firm says the fund is designed to balance returns through diversification and active risk management.
A Growing Appetite for Offshore Exposure
The launch comes at a time when the Capital Markets Authority (CMA) reports that collective investment scheme (CIS) assets in Kenya have crossed the Ksh500 billion mark for the first time. A notable portion of this growth has come from products denominated in foreign currency, reflecting growing investor appetite for offshore options amid macroeconomic uncertainty.
Photo of a person handling Kenyan banknotes. /BIZNA KENYA
Kenya’s economy has been hit by persistent shilling depreciation, rising inflation, and fluctuating interest rates. Over the past year, the local currency has shed significant value against the dollar, eroding returns for investors holding shilling-based assets. For many, global funds now represent not just diversification, but a form of currency hedge.
“We are launching this fund at a time when there is rising demand for diversified offshore investments. Through the product, we will give investors access to local fixed income investments like Treasury bills and bonds, and global tools like ETFs, global equities, and mutual funds," Patrick Nyaga, Group Chief Executive Officer of CIC Insurance, remarked, adding that investors are becoming more sophisticated and globally aware.
Nyaga said the new fund aims to provide consistent capital growth over the medium to long term by reinvesting income and leveraging global market opportunities when they arise.
Partnerships and Positioning
To strengthen its offshore capabilities, CICAM has partnered with the Trade Development Bank (TDB) as a strategic sponsor and Swiss private bank Vontobel for offshore execution support. The Cooperative Bank of Kenya will act as the fund’s custodian, while regulatory oversight will be provided by the Capital Markets Authority.
Humphrey Gathungu, Managing Director of CIC Asset Management, said the fund seeks to make global investing more accessible to ordinary Kenyans.
“Our mission through this fund is to democratise access to investment opportunities in a market segment that has long been the preserve of institutions and high-net-worth clients. Historically, special funds demanded high minimum investment and complex paperwork, and we are changing this model by making the initial investment one of the lowest in the market,” he said.
Market Players Following Suit
CIC is not alone in this space. Over the past year, several Kenyan fund managers, including Britam, ICEA Lion, and Sanlam Investments, have introduced or expanded dollar-based products targeting both retail and institutional clients.
The trend reflects a broader repositioning within Kenya’s asset management sector, as firms respond to changing investor sentiment. In the past, offshore investing was largely the domain of high-net-worth individuals and institutions. Now, technological advances and regulatory support have lowered barriers, opening global markets to middle-class investors.
Analysts say the shift signals the maturation of Kenya’s investment landscape. “Fund managers are realising that the next frontier of growth lies in global exposure,” said a Nairobi-based financial consultant who spoke to Viral Tea on condition of anonymity. “The demand is being driven by a mix of factors — currency depreciation, inflation hedging, and the psychological appeal of investing in stable economies.”
Caution Amid the Hype
While the expansion of global funds signals market evolution, financial experts warn that offshore investing is not without risks. Management fees for global products tend to be higher than local funds, and investors are also exposed to foreign market volatility and regulatory complexities that may not be well understood by retail clients.
“Diversification is important, but it’s not a guarantee against loss,” said the consultant. “Investors must understand that global markets move differently. Without clear disclosures on performance and costs, it’s easy for expectations to be misaligned with reality.”
Transparency and investor education remain key concerns, especially as fund managers rush to market new products. Few firms have publicly disclosed their fee structures or historical performance data for offshore portfolios.
The Bigger Picture
For regulators, the trend presents both opportunity and challenge. The CMA has encouraged innovation in capital markets but must now ensure that offshore funds maintain transparency, sound governance, and investor protection.
As more fund managers pursue global diversification, competition is expected to intensify — not just for investor cash, but also for credibility. Those able to deliver consistent returns and maintain trust will likely set the tone for the next phase of Kenya’s investment industry.
For investors, the message is clear: global investing is becoming more accessible, but not automatically safer or more profitable. The CIC Global Balanced Special Fund and similar products may open new doors, but walking through them wisely will depend on how informed — and cautious — Kenyan investors choose to be.
