By Morris Aron
Investment firm, African Alliance, has increased its level of capitalisation to Sh250 million, as per the new regulations from the Capital Markets Authority.
Following the development, the firm merged its existing fund management and securities businesses into the investment banking operations, in line with CMA’s requirements, a move that is meant to derive from the benefits of the new operations structure.
African Alliance senior executive, Paul Mwai, was optimistic about the re-structuring since it will let the firm handle all operations under the same roof but as divisions within the investment-banking outfit.
"This will see our clients have added confidence in our ability to take on more business with this re-affirmation by our shareholders of this increased investment and significantly increasing share capital," said Mr Mwai.
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"Our clients can expect the usual high level of professionalism, client focus and value adding products and services."
Under the arrangement, the fund management and stock broking divisions will continue to operate under separate divisions with the usual separation of roles and management, with each business retaining their current management and personnel structures.
CMA regulations allow for a company with an investment banker’s license to carry out fund management and securities business and not vice versa.
Going forward, African Alliance said it will cash in on the lucrative retirement sector — that is now valued at Sh420 billion — by allocating funds under its unit trusts to those sectors that have been projected to earn the most investment returns.
Assets under management in unit trust funds have grown to Sh27 billion over the past eight years, according to records published by unit trust providers as at December 31, last year.
African Alliance re-structuring was necessitated by the decision by CMA, which recently published a new list of licensees for the current year two weeks ago following a requirement to boost the level of capitalisation.
