malvernmugadzikwa
Business Writer
Assets under Management (AUM) of Investment Managers reached $500 billion in 2021, increasing from $156 billion in 2020 largely driven by general appreciation of equity based investments.
The Investment managers fall under the supervision of the Securities and Exchange Commission of Zimbabwe (SecZim), and the Commission in its 2020 annual report said industry average stood at $8,24 billion.
“The AUM industry was specifically $534,071,318,090 as at 31 December 2021 and was driven mainly by the recovery of the stock market during the year,” Farai Gwaka, the Association of Investment Managers of Zimbabwe (AIMZ) has said.
The Zimbabwe Stock Exchange (ZSE) market capitalisation grew by 314 percent to $1,3 trillion in 2021, representing high returns on investment.
In December 2020 alone, total turnover was $16,782 billion which was an increase of 88,23 percent compared to the previous month.
Currently, there are about 19 Asset Managers licensed by the industry regulator, SecZim. These are ABC Asset Management Company (Private) Limited, Akribos Wealth Managers (Private) Limited
Alpha Asset Management (Private) Limited, Atria Asset Management (Private) Limited, CBZ Asset Management (Private) Limited and Equivest Asset Management (Private) Limited.
In addition to that, there is Fidelity Life Asset Management (Private) Limited, First Mutual Wealth Management (Private) Limited, Imara Asset Management (Private) Limited, Invesci Asset Management (Private) Limited, MHMK Asset Management (Private) Limited, Nyaradzo Asset Management Company (Private) Limited and Old Mutual Investment Group Zimbabwe (Private) Limited.
Others include Platinum Investment Managers (Private) Limited, Purpose Asset Management (Private) Limited, Smartvest Wealth Managers (Pvt) Ltd, TN Asset Management (Private) Limited and Zimnat Asset Management Company (Private) Limited.
According to the SecZim 2020 annual report, the growth in AUM was driven by continued revaluation of property investments at prevailing interbank rates from USD denominated values as well as the general appreciation of the equity‑based assets.
The report showed that Old Mutual Investments Group (OMIG) continued to dominate the market commanding 50,53 percent of the total AUM.
“The growth in AUM was driven by continued revaluation of real estate assets (property investments)at prevailing interbank rates from USD denominated values as well as the general appreciation of the equity‑based assets,” said the report.
During the year under review, 61,33 percent of AUM was invested in quoted equities, followed by property and unquoted equities which had 31,71 percent and 3,30 percent respectively.
In 2020, most of the securities investment management companies were profitable except Atria, Nyaradzo, and First Mutual Wealth Investment Managers who reported operating losses of $775,107, $3,556,335, and $5,423,138, respectively.
The industry’s average total operating costs to management fees ratio was 123,85 percent an indication that the sector had improved in funding operations from core business, strained by rising costs of doing business due to the inflationary environment.
Of the nineteen (19) asset managers, two (2) asset managers were not adequately capitalized during the period as their adjusted liquid capital could not cover the total capital requirements.
Bongani Ndlovu