Capital Markets

CMA licenses three fund managers as African Alliance drops investment banking

cma

Capital Markets Authority (CMA) CEO Wyckliffe Shamiah on April 29, 2021. PHOTO | LUCY WANJIRU | NMG

Summary

  • African Alliance Kenya Asset Managers Limited, CPF Financial Services Limited, and Kuza Asset Managers Limited will operate as fund managers in the capital markets.
  • As fund managers, the three companies will be advisers who manage client security portfolios more than an amount prescribed by the regulator from time to time.
  • Until this appointment, Africa Alliance Kenya Asset Managers Limited had been operating as a licensed investment bank providing local and on-the-ground investment banking services across the continent.

The Capital Markets Authority (CMA) has licensed three fund managers, bringing the number to 29.

African Alliance Kenya Asset Managers Limited, CPF Financial Services Limited, and Kuza Asset Managers Limited will operate as fund managers in the capital markets.

As fund managers, the three companies will be advisers who manage client security portfolios more than an amount prescribed by the regulator from time to time.

Until this appointment, Africa Alliance Kenya Asset Managers Limited had been operating as a licensed investment bank providing local and on-the-ground investment banking services across the continent.

“The investment bank notified the Authority of its intention to cease operation of their Investment Bank activities, and we accepted the request for revocation of its Investment Bank licence,” said Wyckliffe Shamiah, CMA’s chief executive officer.

“While issuing the approval, the Authority noted that it had revoked the licence of African Alliance Kenya Investment Bank to operate as a licensed investment bank,” said Mr Shamiah.

The company will no longer offer investment banking activities including underwriting new debt and equity securities for all types of corporations, aiding in the sale of securities or helping to facilitate mergers and acquisitions, reorganisations, or broker trades for both institutions and private investors.

Pension fund administrator, CPF Financial Services Limited and asset management company Kuza Asset Managers Limited will implement its client’s investment strategy and manage trading.

It will also oversee mutual funds or pensions, manage analysts, and conduct research that will help make important investment decisions.

The entry of more fund managers is set to raise competition for assets under management, with the firms earning a fee charged as a fraction of the portfolios they oversee.

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