Total assets managed by the Safaricom-backed unit trust scheme, Mali hit Sh2.3 billion in the six months ended June 2024, up from Sh1.4 billion in December 2023, new disclosures show, even as it awaits a fund manager licence that would allow it to take on new investors.
A unit trust is classically a collective investment packaged under a trust deed and run by a professional fund manager. A fund manager may choose to invest in bonds or shares on the stock market, and the fund is split into units, which investors purchase, granting them access to mortgages, securities and cash equivalents.
Mali is currently operating as a closed fund, not open to new investors, as it faces a protracted wait for a full licence following a pilot phase.
This suggests that Mali’s growth in assets under management is largely due to reinvestment by existing investors.
“Initially the product had obtained a licence to run as a pilot. We could not, however, return the money to customers and so the entity has continued to operate as a closed fund,” a source familiar with the operations of Mali told the Business Daily on condition of anonymity.
Safaricom is seeking to revamp the fund upon the acquisition of a full licence, after which it is expected to bring in other fund managers as administrators.
Currently, Genghis Capital has been the fund’s administrator since 2019 when the M-Pesa-based collective investment scheme went to market.
Disclosures from Genghis Capital show that the Mali Money Market Fund added Sh900 million worth of assets under its watch in the six months to June 2024.
The bulk of the fund’s assets are held as investments in fixed deposits at Sh1.3 billion, while investments in government securities stand at Sh585.1 million.
Mali’s other assets include Sh412.2 million in call deposits (withdrawable at any time), Sh30.2 million in bank and cash balances, and a paltry Sh4.5 million in corporate bonds.
The fund made a profit of Sh115.5 million in the six months to June on total income of Sh138.9 million, which includes a Sh12.7 million fair value gain on other investments.
Operating and administrative expenses for the period stood at Sh23.3 million.
Neither Safaricom nor Genghis Capital have disclosed the revenue sharing model for their Mali partnership.
Genghis Capital runs its own money market fund called the Gencap Hela Imara Fund, which had assets of Sh664.5 million in the same period.
The revamp of Mali into a full-fledged collective investment scheme is expected to raise competition among fund managers.
With Safaricom backing the fund, Mali’s market share is expected to rival that of leading managers such as CIC, NCBA, Britam, Sanlam and ICEA.
The funds ended the quarter to March 2024 with an asset base of Sh225.4 billion, a 4.7 percent growth from Sh215.1 billion in December 2023.
The Capital Markets Authority has approved 36 schemes comprising 150 funds, including money market, fixed income, equity, balanced and special funds.
Money market is the most popular of the funds with 41, which mainly invest in cash and near-cash assets.
