Value of managed assets shoots to $500bn

Assets under investment managers increased by 220 percent to $500 billion in 2021 largely driven by general appreciation of equity based investments and inflation linked revaluations.

Investment managers fall under the supervision of the Securities and Exchange Commission of Zimbabwe (SecZim). SecZim said in its 2020 annual report the industry average asset portfolio stood at $8,24 billion.

“The AUM (Assets under management) industry was specifically $534 071 318 090 as at December 31, 2021 and was driven mainly by the recovery of the stock market during the year,” Mr 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 from the bourse.

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, Akribos Wealth Managers, Alpha Asset Management, Atria Asset Management, CBZ Asset Management and Equivest Asset Management.

In addition, there is Fidelity Life Asset Management, First Mutual Wealth Management, Imara Asset Management, Invesci Asset Management, MHMK Asset Management, Nyaradzo Asset Management Company and Old Mutual Investment Group Zimbabwe.

Others include Platinum Investment Managers, Purpose Asset Management, Smartvest Wealth Managers, TN Asset Management and Zimnat Asset Management Company.

According to the SecZim 2020 annual report, the growth in AUM was driven by continued revaluation of property investments at prevailing interbank rates from US dollar 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 19 asset managers, two were not adequately capitalised during the period as their adjusted liquid capital could not cover the total capital requirements.-The Herald