Assets under the management of Safaricom’s Mali unit trust scheme have jumped to KSh 2.3 billion in the first half of 2024. This is a major uplift from the KSh 1.4 billion that was recorded as of the end of December 2023. The fund has, however, remained closed to new investors pending necessary licensing by regulators.
Unit Trust: A type of collective investment scheme in the professional managers of funds who invest the money into bonds and stocks amongst other assets. The sum of money pooled in the fund is divided into units that the investors can buy to achieve a diversified portfolio of investments like mortgages and securities, as well as cash equivalents.
Mali’s Status of Operation: Currently, Mali is a closed fund. This is because the full license from the fund manager came late. Mali’s operationalisation took place after its launch as a pilot, and since then, it has been trying to digest the input of existing investors instead of bringing on board more. Safaricom currently works on getting the full license that would enable them to aggressively market it while hiring more fund managers to use administrators in the market.
Growth in Assets: Genghis Capital, which started managing the Mali fund in 2019, said that the African nation added KSh 900 million to the portfolio in the six months to June 2024. The largest chunk of the asset is held in fixed deposits at KSh 1.3 billion, followed by government securities at KSh 585.1 million, and call deposits at KSh 412.2 million. The fund has smaller exposures to bank and cash balances, corporate bonds, and other investments.
Financial Performance: For the six-month period, Mali booked KSh 115.5 million in profit and a total income of KSh 138.9 million. This includes a KSh 12.7 million gain from the fair value of other investments. During this period, operating and administrative expenses were KSh 23.3 million.
Competitive Landscape: With Safaricom gearing towards turning Mali into a duly licensed collective investment scheme, competition among fund managers is set to increase. The fact that Mali is backed by Safaricom means that it will immediately emerge as a competitor to established players like CIC, NCBA, Britam, Sanlam, and ICEA. So far, the CMA has approved 36 schemes comprising 150 funds, with money market funds being the most popular category.