Chasing the next big investment? How to separate opportunity from hype

But behind the surge in approvals lies a more pressing question: are alternative investments truly reshaping wealth creation in Kenya, or are they the latest financial products riding a wave of sophistication and optimism?

For Joseph Kahinda, Head of Trading, Global Markets at Standard Investment Bank, the momentum reflects a market that is evolving in both appetite and complexity.

“There is a lot of acceptance in the market of special funds,” he says. “There is curiosity, and there is hunger for opportunities beyond conventional stocks and bonds.”

That shift, he explains, is driven by investors who are no longer satisfied with traditional buy-and-hold strategies in listed equities. Instead, they are searching for returns that are not only attractive but resilient across different market cycles.

But Kahinda is quick to add a caution: enthusiasm should not replace scrutiny.

Before committing capital, he says investors must interrogate the fundamentals of any fund—its investment process, risk management framework, and especially its liquidity profile.

“If I need a portion of my investment, how easily can I access it?” he asks. That question alone, he says, tells you a lot about the structure of the product.

For Kahinda, the rise of special funds is not a sign that investing has become simple or superior. Rather, it reflects a market becoming more complex, where opportunity and risk are increasingly intertwined.

Separating opportunity from hype

As alternative investment products multiply, a second challenge is emerging: distinguishing genuine opportunity from financial fashion.

Elizabeth Irungu, CEO of Absa Asset Management, says many products are being packaged in ways that make them appear equally attractive, particularly to retail investors who may lack the tools to interrogate them deeply.

“The first test is simple: where are the returns coming from?” she says. “If you cannot clearly identify what is driving the return, then that is a fad.”

For Elizabeth, the danger lies in narratives that replace fundamentals. Investors, she argues, must move beyond marketing language and focus on verifiable economic drivers.

“Let us talk real numbers, because numbers never lie,” she says. “You need to strip away the hype and understand what is actually creating value.”

She notes that valuation should always be anchored in something tangible—cash flows, underlying assets, or comparable market benchmarks. Without that anchor, pricing can become speculative rather than fundamental.

A key red flag, she warns, is when value depends primarily on participation rather than production.

“When it becomes about the community coming in and more people joining so that value rises, then that is not real value,” she says. “That is hype built on top of a product.”

The liquidity reality

Beyond valuation, liquidity remains one of the most misunderstood aspects of investing in alternative assets.

Different asset classes behave very differently when it comes to access and exit timelines, Elizabeth notes, and mismatched expectations can create financial strain.

“If you are investing in a money market fund, liquidity is usually very quick—within a few days,” she says.

“But if you buy property, you should not expect to access your money quickly.”

The challenge, she observes, arises when investors treat long-term or illiquid assets as though they are easily convertible to cash. When urgent needs arise, that mismatch can become costly.

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Risk is not optional

Elizabeth also points to risk assessment as one of the most overlooked disciplines in investing.

“How many people actually know how to identify or measure risk in the assets they are buying?” she asks.

Every legitimate investment, she argues, has identifiable risks that should be understood and accepted up front.

“A proper asset will always have a risk you can define and say: I can live with this,” she says.

She uses government bonds as an example. While often perceived as safe, they are still subject to market fluctuations.

“When interest rates go up, bond prices go down. When rates go down, bond prices go up,” she explains.

What concerns her most is the marketing of investments as “risk-free”.

“When it is a sure bet, that is the biggest lie you can get from an investment manager,” she says. “The basic question you should always ask is: what can go wrong?”

If that question cannot be answered clearly, she advises caution.

A system shift

As financial products become more sophisticated, the conversation is also shifting at an institutional level.

Ewart Salins, the director of the Kenya Association of Stockbrokers and Investment Banks (KASIB), says investors are increasingly being exposed to instruments such as exchange-traded funds (ETFs), index funds, stablecoins and private market products—concepts that were once confined to institutional finance.

But he warns that understanding remains uneven.

“Your first port of call should always be your investment advisor,” he says. “Theoretically, they should know what they are talking about.”
Ewart also highlights how narrow many investors’ thinking remains, despite increasing global access.

Using Kenya as an example, he notes that many investors still concentrate heavily on local markets, despite their limited scale in a global context.

“If you place Kenya globally, it is just a thin line—you can barely see it,” he says.

That reality, he argues, underscores the importance of diversification and looking beyond familiar investment environments.

At an institutional level, attention is also shifting toward alternatives such as infrastructure investments, particularly through pension funds.

“We are trying to get more trustees of pension funds to look at alternatives,” he says. “We are ready to play ball and invest in infrastructure.”

However, he stresses that governance remains essential. Without strong oversight, innovation can quickly become risk.

As Kenya’s investment landscape expands, these experts agree that opportunity is growing, but so is complexity. The most valuable investment is not in any single fund, asset class or trend. It is in knowing the difference between opportunity and illusion.

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