GenAfrica Asset Managers money market fund has reached Sh921 million in assets under management as of April 24, moving it closer to a Sh1 billion valuation.
Money market funds describe a category of investments that primarily places cash in short-term instruments such as Treasury bills and fixed deposits.
The GenAfrica money market fund has more than doubled its assets under management in the first four months of the year, growing from a base of Sh421 million as at the end of December 2023 or a 118 percent rise.
The asset manager launched the fund in December 2022 as it sought to bring retail investors to the collective investments stable.
The fund has so far admitted 600 clients and had a 16.76 percent annual effective yield as of April 24 with a daily yield of 15.5 percent.
In contrast, the fund’s daily yield stood at 9.73 percent with an implied annual return rate of 10.21 percent at inception. The growth in returns for the fund is attributable to the general rise of interest rates on instruments such as Treasury bonds and fixed deposits over the past year.
The doubling of assets under management in just over three months mirrors GenAfrica’s ability to attract clients in a competitive market that boasted of Sh215 billion in assets at the end of last year.
“We truly believe in our money market fund and retail products. Our future in the retail space is focused on elevating client satisfaction and driving sustainable growth. We are anticipating that in the next two to three weeks, we will cross the Sh1 billion mark,” said GenAfrica Asset Managers managing director Patrick Kariuki.
According to disclosures by the Capital Markets Authority, the money market fund had the bulk of its assets invested as fixed deposits at Sh344 million as of December 2023.
GenAfrica money market fund requires a minimum investment of Sh500,000 and has a two percent fund management fee. The fund distributes income monthly to clients through the issuance of new units and targets low-risk investors interested in capital preservation and ease of liquidity.
“The investment strategy aims at securing interest above local bank rates while ensuring the clients capital is secured,” GenAfrica says in the fund’s factsheet.
The fund’s service providers include Standard Chartered Bank which serves as a custodian and KCB Bank Kenya, which plays the role of trustee.
While the fund requires a Sh500,000 minimum investment, GenAfrica allows retail investors to start with a lower balance and build up to the set threshold.
The fund manager says the higher minimum requirement allows the investment to become more meaningful in terms of its growth in scale.
