The National Social Security Fund (NSSF) is planning to significantly increase its investments in offshore equities as part of a broader strategy to diversify its portfolio and reduce its heavy reliance on domestic assets. The state-backed pension fund is seeking to appoint an investment manager to establish and manage a multi-asset offshore portfolio, which will largely be denominated in foreign currencies such as the US dollar.
The strategy is aimed at reducing NSSF’s concentration in Kenyan government securities, which accounted for approximately 79.0% of its Kshs 379.9 bn investment portfolio as of December 2025. By investing in international markets, the fund expects to diversify its sources of returns, gain exposure to foreign currencies and reduce its dependence on the performance of Kenya’s sovereign debt market.
Offshore equities will form a key component of the new investment strategy, with NSSF expected to focus mainly on North American markets, particularly the United States, alongside selected opportunities in the Asia-Pacific region and Africa. The fund also intends to increase its exposure to regional and local private equity, venture capital, trade finance and privatization opportunities, including initial public offerings of State corporations.
NSSF has set a target net return of between 3.0% and 4.0% above the Secured Overnight Financing Rate (SOFR), a US dollar interest-rate benchmark, over a three-to-five-year investment period. The broader alternative investment programme is expected to achieve a minimum average net return of 6.5%, supporting the fund’s objective of generating sustainable long-term returns for its members.
Currently, NSSF has only about Kshs 34.2 bn invested in offshore assets, representing approximately 6.0% of its total portfolio. This is significantly below the Retirement Benefits Authority’s limit, which permits pension funds to allocate up to 15.0% of their assets to offshore equities.
Beyond capital markets, NSSF is also seeking to increase its participation in infrastructure and affordable housing projects. The fund recently entered into a joint venture with China Road and Bridge Corporation for the construction of the Rironi-Mau Summit road. It plans to participate in infrastructure projects through equity investments, mezzanine debt and joint-venture arrangements.
The offshore strategy will also involve active portfolio management and regular rebalancing across approved markets and asset classes. The appointed investment manager will be expected to strengthen NSSF’s internal investment capabilities by providing technology, reporting systems and training in areas such as offshore investing, foreign-exchange risk and performance attribution.
