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Transcript

Kuza Asset Management · The Mwango Capital Podcast

• 0:00
  SPEAKER_00: Thank you so much for joining us on Mongo Spaces.
• 0:02
  SPEAKER_00: This starts the evening.
• 0:03
  SPEAKER_00: Our aim today is to understand the journey of goods asset management from zero to 1
• 0:09
  SPEAKER_00: billion in assets under management.
• 0:10
  SPEAKER_00: So to help us select that, we have James Mosse here who's going to help us break that down.
• 0:16
  SPEAKER_00: I note that you're a CFA, so I will come to that a bit later in the conversations.
• 0:21
  SPEAKER_00: James,
• 0:21
  SPEAKER_00: maybe you can tell us a bit about yourself and a quick high-level maybe view of yourself,
• 0:26
  SPEAKER_00: a quick elevator pitch.
• 0:27
  SPEAKER_00: Thank you, Bokfu.
• 0:29
  SPEAKER_01: having me this evening.
• 0:31
  SPEAKER_01: So my name is Jens Mothe.
• 0:33
  SPEAKER_01: I'm the CEO of Kooza Asset Management.
• 0:38
  SPEAKER_01: So before Kooza, I've been in the industry for quite some time.
• 0:42
  SPEAKER_01: So my years of experience down to 17 years.
• 0:47
  SPEAKER_01: So I started from the sell side.
• 0:49
  SPEAKER_01: So I started my career at Dyer and Blair Investment Bank,
• 0:53
  SPEAKER_01: then went to Sandvik Bank because the investment analytics are all mutual.
• 0:59
  SPEAKER_01: Our investment group as a portfolio manager,
• 1:01
  SPEAKER_01: UAP Investment as a portfolio manager,
• 1:04
  SPEAKER_01: which will acquire UAP back to which were very short things left for Britain.
• 1:09
  SPEAKER_01: At the time I was living in Britain,
• 1:10
  SPEAKER_01: I was a rich investment officer overseeing about $2 billion in African money.
• 1:16
  SPEAKER_01: KUZA was founded in the year 2021.
• 1:20
  SPEAKER_01: So it was the tail end of 2021.
• 1:22
  SPEAKER_01: Then we applied for our CMA license just before the end of 2021.
• 1:27
  SPEAKER_01: We managed to be our CMA investors.
• 1:29
  SPEAKER_01: Towards the end of actually April 2022, opened our doors for business beginning of July 2022.
• 1:37
  SPEAKER_01: Got our first plant coming in, a photo hogar 2022.
• 1:42
  SPEAKER_01: Fast forward, now we have 1,300 plants and we just passed a billion in after fund management.
• 1:50
  SPEAKER_01: That's Jace and that's Kuza.
• 1:51
  SPEAKER_01: After tomorrow, we'll continue to brief.
• 1:54
  SPEAKER_00: All right.
• 1:55
  SPEAKER_00: Thank you so much.
• 1:55
  SPEAKER_00: There's a lot to unpack there.
• 1:57
  SPEAKER_00: A quick one.
• 1:57
  SPEAKER_00: What does a CIO do?
• 1:59
  SPEAKER_00: What are you doing at Britam with 2 billion assets under management?
• 2:03
  SPEAKER_00: What do you do to that?
• 2:03
  SPEAKER_00: Okay.
• 2:04
  SPEAKER_01: A chief investment officer is basically the person heading the investment
• 2:09
  SPEAKER_01: decision-making of an asset management company.
• 2:12
  SPEAKER_01: So you're heading a team of portfolio managers and a team of investment analysts.
• 2:18
  SPEAKER_01: The 240 billion cash in it predominantly was actually patient assets.
• 2:22
  SPEAKER_01: Of course, all these patient assets have their unique investment policy statements.
• 2:27
  SPEAKER_01: And of course, they're heavily regulated by the Italian bank's security.
• 2:31
  SPEAKER_01: So as you make the investment, there are confines within which you must make those investments.
• 2:36
  SPEAKER_01: And then we also had which, of course,
• 2:38
  SPEAKER_01: highly regulated as well by the capital market authority.
• 2:42
  SPEAKER_01: You have wiggle room to make investment decisions but must make sure that the
• 2:46
  SPEAKER_01: unique investment policy statements for all these products are observed and you
• 2:50
  SPEAKER_01: then make sure that you bring for a competitive risk-weighting return.
• 2:54
  SPEAKER_01: And you don't just make the investment.
• 2:56
  SPEAKER_01: Of course, there's a process.
• 2:57
  SPEAKER_01: The research team then comes with the recommendation.
• 3:00
  SPEAKER_01: Those recommendations are projected before an investment committee that has
• 3:04
  SPEAKER_01: membership of the research analyst,
• 3:06
  SPEAKER_01: investment analyst,
• 3:07
  SPEAKER_01: portfolio manager.
• 3:08
  SPEAKER_01: And of course, the chair of that investment committee is the chief investment officer.
• 3:13
  SPEAKER_00: Then what made you jump from formal employment to being an entrepreneur at Kooza?
• 3:18
  SPEAKER_01: That's actually a very good question.
• 3:20
  SPEAKER_01: So the Kooza Affiliate Management journey started maybe way earlier than 2021.
• 3:28
  SPEAKER_01: So, of course, I had this vision, this idea of starting an affiliate management company.
• 3:33
  SPEAKER_01: And just looking at Kenya, where we are, just look at, for instance, our saving rate.
• 3:38
  SPEAKER_01: You go by the World Bank.
• 3:41
  SPEAKER_01: data which looks at saving as a percentage of GDP,
• 3:45
  SPEAKER_01: then you try to look at the Kenyan data point and compare that to the global data point.
• 3:50
  SPEAKER_01: There is a big disparity.
• 3:51
  SPEAKER_01: We're at 16.
• 3:52
  SPEAKER_01: The global number is at 27.
• 3:55
  SPEAKER_01: You try to drill that number and just look at Kenyan and look at the level of
• 4:00
  SPEAKER_01: financial literacy in this part of the world.
• 4:03
  SPEAKER_01: That should be next to nil.
• 4:05
  SPEAKER_01: And that claim, if, for instance, you look at SPAC in deposit, you're looking at close to $6 trillion.
• 4:11
  SPEAKER_01: And when you look at the cost of funds for banks,
• 4:15
  SPEAKER_01: all the 39 banks put together on average,
• 4:17
  SPEAKER_01: it's actually below 3%.
• 4:20
  SPEAKER_01: And the reason why cost of funds,
• 4:22
  SPEAKER_01: the cost of those deposits,
• 4:23
  SPEAKER_01: the rate is that low is because most of this money has been given to banks for free.
• 4:27
  SPEAKER_01: This money is in current accounts.
• 4:29
  SPEAKER_01: I saw the opportunity earlier.
• 4:31
  SPEAKER_01: That if for instance,
• 4:32
  SPEAKER_01: then you can push financial literacy,
• 4:34
  SPEAKER_01: you can actually unlock a lot of money into asset management.
• 4:39
  SPEAKER_01: And you want to be competing with the existing fund manager because you'll be
• 4:45
  SPEAKER_01: creating a blue horse for yourself.
• 4:47
  SPEAKER_01: Of course,
• 4:48
  SPEAKER_01: packaged all that into a business plan for the idea to potentially invest in,
• 4:53
  SPEAKER_01: then of course the investor came on board and we then raised enough capital to set
• 4:58
  SPEAKER_01: up KUZA as
• 4:59
  SPEAKER_01: And that's so cool that risk management had been founded in 2021.
• 5:04
  SPEAKER_00: Founding, often the problem is not starting.
• 5:07
  SPEAKER_00: The problem is in getting the first shilling to manage.
• 5:10
  SPEAKER_00: Then how do you get that?
• 5:12
  SPEAKER_00: And how do you leverage your networks and access to be able to get that first
• 5:16
  SPEAKER_00: person on board to be your client?
• 5:18
  SPEAKER_01: It's a very good question.
• 5:19
  SPEAKER_01: And like I said, we opened our doors for business.
• 5:22
  SPEAKER_01: Beginning of July 2022, we got our first client coming, 4th of August 2022.
• 5:28
  SPEAKER_01: I think the timing was also very good, and not by design, but it happened that markets go through cycles.
• 5:36
  SPEAKER_01: If you remember 2022, that's the time the Kenyan Euromon were really oversold.
• 5:41
  SPEAKER_01: Just looking at the 2034 Euromon,
• 5:44
  SPEAKER_01: that is my very next one,
• 5:45
  SPEAKER_01: it was partially redeemed in February this year.
• 5:48
  SPEAKER_01: Australian levels of about 20%.
• 5:53
  SPEAKER_01: So we saw that idea,
• 5:54
  SPEAKER_01: and as we were waiting for product approval,
• 5:58
  SPEAKER_01: then we said the immediate product that we can start running with is private work manual.
• 6:04
  SPEAKER_01: If we can find high net worth Kenyans,
• 6:07
  SPEAKER_01: we can see this unique opportunity that as much as there is no investments without risk,
• 6:14
  SPEAKER_01: but Kenyan sovereign bond that maturing in about two years,
• 6:19
  SPEAKER_01: trading at 20% on the donor,
• 6:22
  SPEAKER_01: that was serious mispricing.
• 6:24
  SPEAKER_01: And of course,
• 6:25
  SPEAKER_01: we managed then to convince our five high-net-worth clients who came on board to
• 6:32
  SPEAKER_01: invest 200,000 US dollars with us because the ticket signed for Eurobond,
• 6:37
  SPEAKER_01: Eurobond's trade in lots of 200,000 dollars.
• 6:40
  SPEAKER_01: So that will give or take about 35 million Tenshin.
• 6:44
  SPEAKER_01: That was our first client coming on board.
• 6:46
  SPEAKER_01: Then once, of course, the client came on board, it became easier.
• 6:50
  SPEAKER_01: Now trying to sell because already you have a client who believed in the opportunity.
• 6:55
  SPEAKER_01: Some more clients came in and got under the Eurobond opportunity.
• 7:00
  SPEAKER_01: And then, of course, we got our product approved.
• 7:02
  SPEAKER_01: And now the entry threshold for like Unitrust product increased.
• 7:07
  SPEAKER_01: very low.
• 7:08
  SPEAKER_01: So you'll be looking at, for instance, a money market fund.
• 7:11
  SPEAKER_01: A money market fund, the minimum investment amount is 5,000 shillings.
• 7:15
  SPEAKER_01: So that now became much, much easier.
• 7:17
  SPEAKER_01: Also, we didn't want just to be a normal fund manager.
• 7:22
  SPEAKER_01: Remember, you're pushing paper.
• 7:23
  SPEAKER_01: We knew the opportunity really is just to make sure that you never get the currency.
• 7:27
  SPEAKER_01: For instance, you don't have to sell any paper to invest in our Unitos product.
• 7:33
  SPEAKER_01: All you need to do is just, if you're using an Android phone or an iPhone,
• 7:38
  SPEAKER_01: Play Store or App Store,
• 7:40
  SPEAKER_01: search for Kooza.Africa,
• 7:42
  SPEAKER_01: then you should be able to get our average drop-off book.
• 7:44
  SPEAKER_01: The process doesn't take more than five minutes, which requires us to measure.
• 7:50
  SPEAKER_01: And like I said, we have about 1,300 clients.
• 7:53
  SPEAKER_01: And it's less than 10% of those clients who've ever been to our office.
• 7:59
  SPEAKER_01: Most of these clients have come on board.
• 8:01
  SPEAKER_01: Through our online platforms,
• 8:03
  SPEAKER_01: the mobile application or our client portal,
• 8:06
  SPEAKER_01: and they've been able to come on board and they're happy with the returns,
• 8:10
  SPEAKER_01: they're happy with the customer service,
• 8:11
  SPEAKER_01: they don't see any need of coming to the office.
• 8:13
  SPEAKER_01: That's what we want to continue doing so that as we scale,
• 8:17
  SPEAKER_01: most of these clients should be able to perform well.
• 8:20
  SPEAKER_00: So what I hear you say is that you're a digital fast asset management company, right?
• 8:24
  SPEAKER_00: We are among the fund managers in Kenya who are really leveraging digital clients.
• 8:29
  SPEAKER_00: That's good to hear.
• 8:30
  SPEAKER_00: Perhaps now it would be a good time then to give us a bit of a breakdown on who the
• 8:34
  SPEAKER_00: asset management is and what your key products are that you provide to clients.
• 8:38
  SPEAKER_00: Thank you.
• 8:39
  SPEAKER_01: Yes, just going through our product.
• 8:41
  SPEAKER_01: So we have products that are regulated by the capital markets of the country.
• 8:45
  SPEAKER_01: We also have products that are regulated by the economy of the country.
• 8:49
  SPEAKER_01: So we are regulated by both the CMA and the RBA.
• 8:53
  SPEAKER_01: So on the CMA side, we have a collection scheme.
• 8:56
  SPEAKER_01: So we have a Kenya Shilling money market fund.
• 8:59
  SPEAKER_01: We have a Kenya Shilling fixed income fund.
• 9:01
  SPEAKER_01: We have a Momentum fund, which is a trading fund.
• 9:05
  SPEAKER_01: We have a money market fund, USD.
• 9:09
  SPEAKER_01: And we have a Sharia momentum fund.
• 9:11
  SPEAKER_01: So if you hear the naming of all those products,
• 9:14
  SPEAKER_01: we don't have a balance fund and we don't have an equity fund.
• 9:18
  SPEAKER_01: And that was quite deliberate because having been in the industry for quite some time,
• 9:22
  SPEAKER_01: we've seen the performance of equity funds and balance funds in these markets
• 9:26
  SPEAKER_01: because they adopt buy and hold strategy.
• 9:29
  SPEAKER_01: They don't make money because our market is heavily, it's pretty much the market is heavily.
• 9:34
  SPEAKER_01: So it's up, down, up, down.
• 9:35
  SPEAKER_01: So if for instance,
• 9:36
  SPEAKER_01: then you don't trade and take advantage of Google Cycle and you just buy Sapphire Coal,
• 9:40
  SPEAKER_01: grow with Sapphire Coal more than it for the first inning.
• 9:43
  SPEAKER_01: Comes down to 13 shilling, you're still holding it.
• 9:46
  SPEAKER_01: Going to currently about 18 shilling, you still are holding it.
• 9:50
  SPEAKER_01: You may never make money.
• 9:52
  SPEAKER_01: So then we saw an opportunity now to introduce a trading fund,
• 9:56
  SPEAKER_01: Momentum Funds,
• 9:57
  SPEAKER_01: which basically,
• 9:59
  SPEAKER_01: just as they name Momentum,
• 10:02
  SPEAKER_01: goes into the asset platform we need for the Momentum then.
• 10:07
  SPEAKER_01: And once we milk the Momentum,
• 10:09
  SPEAKER_01: we rotate to the next asset that we believe pertains to actually have Momentum.
• 10:14
  SPEAKER_01: Those are our products on the QMA front.
• 10:18
  SPEAKER_01: The Sharia Momentum Fund exactly does what the Noble Momentum Fund does,
• 10:23
  SPEAKER_01: but only then invests in what you call Sharia Compliance Opportunities.
• 10:28
  SPEAKER_01: So it turns free for tax EABL, it turns tax BG to the tax bank, but it can invest in property.
• 10:35
  SPEAKER_01: Then it can't invest in bonds.
• 10:37
  SPEAKER_01: It can only invest in scoops.
• 10:40
  SPEAKER_01: Or you can do a bank placement, but not for interest purposes, but in pursuit of share of profit.
• 10:46
  SPEAKER_01: So there are a few banks in Kenya who have products that are Sharia compliant.
• 10:50
  SPEAKER_01: So then our Sharia momentum fund can invest in that product.
• 10:54
  SPEAKER_01: So that's on our CMA front.
• 10:57
  SPEAKER_01: Then on the RBA front, we have an individual patient plan.
• 11:00
  SPEAKER_01: We have an umbrella patient plan.
• 11:02
  SPEAKER_01: And soon we'll be introducing an income drawdown product.
• 11:06
  SPEAKER_01: And by the strength of being a licensee of RBA, then we can manage our own pension scheme.
• 11:12
  SPEAKER_01: And also, over and above that, we do private wealth management.
• 11:16
  SPEAKER_01: It's on the strength of female licensing and exchange.
• 11:20
  SPEAKER_01: Dave, now a bit of talk.
• 11:22
  SPEAKER_01: high-net-worth client who wouldn't want them to invest in the unit.
• 11:27
  SPEAKER_01: So they come with their portfolio,
• 11:29
  SPEAKER_01: we sit down,
• 11:30
  SPEAKER_01: develop for them an investment policy statement,
• 11:33
  SPEAKER_01: and then start managing their portfolio.
• 11:35
  SPEAKER_01: So broadly, those are our products.
• 11:38
  SPEAKER_01: And relatively putting their assets together, that then get to more than a billion cash.
• 11:46
  SPEAKER_00: If I get it correctly, the CMS side is on a quarter of that.
• 11:50
  SPEAKER_01: So if you look at our collection of investment schemes currently,
• 11:54
  SPEAKER_01: so the cash sharing,
• 11:55
  SPEAKER_01: money market fund,
• 11:56
  SPEAKER_01: money market fund,
• 11:57
  SPEAKER_01: dollar,
• 11:58
  SPEAKER_01: fixed income fund,
• 11:59
  SPEAKER_01: career momentum funds,
• 12:01
  SPEAKER_01: and the momentum funds,
• 12:02
  SPEAKER_01: all those have put together.
• 12:04
  SPEAKER_01: They're now around 400 million.
• 12:06
  SPEAKER_01: Then the balance is basically private wealth management and the pension app.
• 12:11
  SPEAKER_00: Maybe you can run and repeat them without breaking down the key products so that
• 12:16
  SPEAKER_00: people can remember that as they maybe seek your services at some point.
• 12:21
  SPEAKER_00: So under the CMS side and under the RBA side, you can give the key products, just list them.
• 12:28
  SPEAKER_01: Okay, so we can start with CMA, or Connective Investment Scheme.
• 12:32
  SPEAKER_01: So we have money market, Kenya Shilling, whereby the minimum investment amount is 5,000 Kenya Shilling.
• 12:40
  SPEAKER_01: Currently, our money market fund is yielding 17.5%.
• 12:45
  SPEAKER_01: Then we have Money Market Fund Dollar, which is currently yielding about 7.05% on the dollar.
• 12:54
  SPEAKER_01: Minimum investment amount is $100.
• 12:58
  SPEAKER_01: We have a fixed income fund, Zero Connect Investment Scheme, currently yielding about 60%.
• 13:06
  SPEAKER_01: Minimum investment amount, $5,000.
• 13:09
  SPEAKER_01: We have a momentum fund.
• 13:12
  SPEAKER_01: We make it a trading fund.
• 13:13
  SPEAKER_01: We are under still a collective investment scheme, but under the category of special fund.
• 13:18
  SPEAKER_01: The minimum investment amount is $250,000.
• 13:20
  SPEAKER_01: And these are funds that across
• 13:25
  SPEAKER_01: asset classes in hand for momentum.
• 13:28
  SPEAKER_01: Actually,
• 13:28
  SPEAKER_01: like Fraser,
• 13:29
  SPEAKER_01: this year our momentum fund is up close to 40% because we took a bet on the
• 13:35
  SPEAKER_01: Canadian equity market and seeing how strong the performance has been thus far.
• 13:39
  SPEAKER_01: This momentum fund has been a big beneficiary.
• 13:43
  SPEAKER_01: Then we have Sharia momentum fund.
• 13:44
  SPEAKER_01: Minimum, that minimum is 250,000.
• 13:49
  SPEAKER_01: And the return currently is expected profit of 12% for Sharia momentum fund.
• 13:56
  SPEAKER_01: Then that fund arrives.
• 13:58
  SPEAKER_01: basically the collecting investment scheme.
• 14:01
  SPEAKER_01: But on the strength of our CMA license, we do private work management.
• 14:05
  SPEAKER_01: And private work management,
• 14:07
  SPEAKER_01: specifically for high net worth individuals,
• 14:10
  SPEAKER_01: you come,
• 14:11
  SPEAKER_01: you have a shutdown,
• 14:12
  SPEAKER_01: then drafts,
• 14:13
  SPEAKER_01: then investment policy statements at managing,
• 14:15
  SPEAKER_01: in your firm, but still we need private wealth management.
• 14:18
  SPEAKER_01: At least we've come across a few opportunities.
• 14:21
  SPEAKER_01: Like for instance, what I talked about, Eurobonds in 2022, going all the way to, say, O3.
• 14:28
  SPEAKER_01: Now the opportunity that we are seeing is the infrastructure bond,
• 14:33
  SPEAKER_01: because we believe we're going to next year,
• 14:36
  SPEAKER_01: great headed lower.
• 14:37
  SPEAKER_01: And so the best trip now will be taking these infrastructure bonds at the current level.
• 14:43
  SPEAKER_01: and then treat them as you go to next year.
• 14:45
  SPEAKER_01: So for such key opportunities as well,
• 14:47
  SPEAKER_01: we can give our clients access to those opportunities through our pilot work.
• 14:51
  SPEAKER_01: And then on the CMA front, we have our IPP as individual patient plan.
• 14:58
  SPEAKER_01: So basically these are products, for instance, you've changed jobs.
• 15:02
  SPEAKER_01: Maybe now you like James who's worked for say five employers.
• 15:07
  SPEAKER_01: So you have your patients pattern across.
• 15:10
  SPEAKER_01: So these products helps you consolidate all your patient benefits into one key so
• 15:16
  SPEAKER_01: that even as you do follow up.
• 15:18
  SPEAKER_01: You're not following up with five schemes, five or six schemes.
• 15:22
  SPEAKER_01: You only just follow up with one scheme.
• 15:25
  SPEAKER_01: And we also have Umbrella Patient Plan.
• 15:27
  SPEAKER_01: So Umbrella Patient Plan,
• 15:28
  SPEAKER_01: and this is for,
• 15:29
  SPEAKER_01: say,
• 15:30
  SPEAKER_01: a medium-sized organization,
• 15:32
  SPEAKER_01: whereby it may not make sense to come up with your own standalone patient.
• 15:37
  SPEAKER_01: So you...
• 15:38
  SPEAKER_01: then plug into our umbrella and enjoy an economy of care.
• 15:43
  SPEAKER_01: Because if you are a medium-sized organization,
• 15:47
  SPEAKER_01: maybe your pension is a size of 50,
• 15:51
  SPEAKER_01: 100 million,
• 15:52
  SPEAKER_01: 200 million,
• 15:53
  SPEAKER_01: you must make sure that you pay for services or fund manager,
• 15:56
  SPEAKER_01: custodian,
• 15:57
  SPEAKER_01: an administrator,
• 15:59
  SPEAKER_01: you pay for annual audits.
• 16:01
  SPEAKER_01: You must make sure you have your trustees then overseeing the operations of the scheme.
• 16:06
  SPEAKER_01: It becomes very cost inefficient.
• 16:10
  SPEAKER_01: But if then you plug into Umbrella, we have maybe 10, 5 of you.
• 16:16
  SPEAKER_01: When you spread all those costs across all those main employers,
• 16:19
  SPEAKER_01: it becomes very cost effectively inefficient.
• 16:22
  SPEAKER_01: We're also in the process of introducing an income drawdown for now retirees.
• 16:28
  SPEAKER_01: So when you retire,
• 16:29
  SPEAKER_01: you have an option of buying and earning from insurance companies or investing in
• 16:33
  SPEAKER_01: an income drawdown.
• 16:34
  SPEAKER_01: The income drawdown will be specifically addressing the need of retirees.
• 16:38
  SPEAKER_01: Totally.
• 16:39
  SPEAKER_01: Those are our programs, Mukai.
• 16:43
  SPEAKER_00: All right.
• 16:43
  SPEAKER_00: Thank you so much.
• 16:44
  SPEAKER_00: We're almost halfway through the conversation.
• 16:46
  SPEAKER_00: Well, so if you're in the audience and you have a few questions, I can see a few coming in.
• 16:49
  SPEAKER_00: Just go below the PIMS tweet and then you can write the questions there.
• 16:53
  SPEAKER_00: And then the second thing you can also do is you can DM us the questions and we're
• 16:56
  SPEAKER_00: definitely tracking them.
• 16:58
  SPEAKER_00: Well, then we'll be able to forward them to Glenn as well.
• 17:01
  SPEAKER_00: So one question that has come in,
• 17:03
  SPEAKER_00: James,
• 17:03
  SPEAKER_00: for you specifically,
• 17:04
  SPEAKER_00: your journey to asset management,
• 17:07
  SPEAKER_00: did you dream of it when you were young or is it something that came along the way?
• 17:10
  SPEAKER_00: Did you dream of managing money?
• 17:13
  SPEAKER_01: It's actually a very good question.
• 17:14
  SPEAKER_01: So I have this mentor who happens actually to be my uncle.
• 17:20
  SPEAKER_01: I saw him high graphically, he was leading his life.
• 17:23
  SPEAKER_01: He then become finance.
• 17:25
  SPEAKER_01: Then of course, went ahead and did a PhD in finance.
• 17:29
  SPEAKER_01: And what exactly I kept on telling myself was that when I grew up as well, I'd like to be in finance.
• 17:34
  SPEAKER_01: Then in university, I did become a finance.
• 17:38
  SPEAKER_01: Then after I graduated from the university, I was ready to join a bank.
• 17:42
  SPEAKER_01: I was ready to join the big four, the dark-wooded funds.
• 17:46
  SPEAKER_01: And I had a discussion with this mentor.
• 17:49
  SPEAKER_01: I worked with my uncle called Daniel Blair Kinney.
• 17:52
  SPEAKER_01: He was one of
• 17:53
  SPEAKER_01: topical leader to consider.
• 17:55
  SPEAKER_01: He happened to be friends with the then deputy managing director Danny Blair.
• 18:03
  SPEAKER_01: So we had discussions and I joined Danny Blair when he turned the right front ministry.
• 18:07
  SPEAKER_00: So if someone wants to do asset management or touch on asset management from
• 18:12
  SPEAKER_00: What are some of the things that you've learned along the way in terms of maybe
• 18:15
  SPEAKER_00: setting up a fund that you can share with anyone who wants to start one in the future?
• 18:20
  SPEAKER_01: One, I'd like to encourage anyone who wants to dream that it's actually very possible.
• 18:25
  SPEAKER_01: And I don't agree that the market is frustrating.
• 18:29
  SPEAKER_01: I think the market is extremely wrong.
• 18:32
  SPEAKER_01: And if we even just do comparison,
• 18:35
  SPEAKER_01: just compare ourselves,
• 18:36
  SPEAKER_01: say to South Africa is maybe four times bigger.
• 18:40
  SPEAKER_01: the common GDP.
• 18:41
  SPEAKER_01: But if you look at the number of asset managers in South Africa,
• 18:44
  SPEAKER_01: there are about 339 fund managers in South Africa.
• 18:48
  SPEAKER_01: And here in Kenya, we have about 40.
• 18:50
  SPEAKER_01: So that is eight times more fund managers in South Africa as compared to the number that we've got here.
• 18:57
  SPEAKER_01: So the room is very big.
• 19:00
  SPEAKER_01: And like I said at the very beginning, the opportunity is in financial illiteracy.
• 19:05
  SPEAKER_01: To be honest, if you talk to a typical normal Kenyan, a typical normal Kenyan is
• 19:11
  SPEAKER_01: Financially, it sounds bad, but it's financially needy.
• 19:14
  SPEAKER_01: Because beyond investing in land and buying an apartment or buying a house or
• 19:21
  SPEAKER_01: starting a business,
• 19:23
  SPEAKER_01: normal Kenyans don't know about these underinvestment opportunities.
• 19:26
  SPEAKER_01: And that explains why, like I said at the beginning, why close to about $2 trillion in the
• 19:32
  SPEAKER_01: deposits that are sitting in banks, 39 banks, is actually money in current account.
• 19:37
  SPEAKER_01: Because these people don't know that they can actually have a money market account.
• 19:42
  SPEAKER_01: And if they need the money, within two days, they'll get the money.
• 19:45
  SPEAKER_01: So if it's ease of access, a money market fund will give you a track with that.
• 19:49
  SPEAKER_01: And now, as opposed to that money, I'm just sitting hiding in the bank.
• 19:53
  SPEAKER_01: As opposed to growing, it's even shrinking because you have to pay bank charges.
• 19:57
  SPEAKER_01: Yeah, it should be earning you the $17.53 that I talked about because of my market fund.
• 20:03
  SPEAKER_01: So I'd encourage anyone thinking about this to start.
• 20:07
  SPEAKER_01: And I've worked now with the regulator,
• 20:10
  SPEAKER_01: and I can encourage everyone that our regulators are very supportive.
• 20:13
  SPEAKER_01: They want the market to depend as well.
• 20:15
  SPEAKER_01: We didn't have to use any connection to get a license.
• 20:18
  SPEAKER_01: We just met the requirements that I set out.
• 20:20
  SPEAKER_01: So just make sure that you have a solid business plan,
• 20:23
  SPEAKER_01: the capital,
• 20:24
  SPEAKER_01: which is 10 million,
• 20:26
  SPEAKER_01: and you can show too that the capital,
• 20:28
  SPEAKER_01: you have it,
• 20:29
  SPEAKER_01: you have a solid team behind you because again,
• 20:32
  SPEAKER_01: asset management is about
• 20:34
  SPEAKER_01: Here,
• 20:35
  SPEAKER_01: being able to see these opportunities and take advantage of these opportunities
• 20:39
  SPEAKER_01: before they become obvious to everyone.
• 20:41
  SPEAKER_01: So you can demonstrate the strong team behind you.
• 20:45
  SPEAKER_01: You've got strong governance structures.
• 20:47
  SPEAKER_01: You'll be given a license.
• 20:48
  SPEAKER_01: And then you're passionate about it.
• 20:51
  SPEAKER_01: And you've seen the gap.
• 20:52
  SPEAKER_01: You go for the gap.
• 20:53
  SPEAKER_01: The money and the clients will come.
• 20:55
  SPEAKER_00: Those are really good points that you shared there in terms of creating and helping
• 20:59
  SPEAKER_00: Kenyan definitely to become more financially literate.
• 21:01
  SPEAKER_00: What are some of the challenges maybe you've encountered in setting up an asset management,
• 21:05
  SPEAKER_00: getting it to one billion that you'd also maybe want to share in terms of the
• 21:08
  SPEAKER_00: challenges that you've had?
• 21:09
  SPEAKER_00: And then also, what's the difference between being governed by RBA and by CMA?
• 21:14
  SPEAKER_00: And how do those two maybe collide in your business?
• 21:17
  SPEAKER_00: Very good question.
• 21:18
  SPEAKER_01: So the challenge is no one wants to be your customer.
• 21:22
  SPEAKER_01: You can have a very good product.
• 21:24
  SPEAKER_01: Because investors have banned their figures in the past.
• 21:28
  SPEAKER_01: So, of course, they'll ask you, how different are you from before?
• 21:32
  SPEAKER_01: Then they'll go further and be like, okay, how many clients do you have?
• 21:37
  SPEAKER_01: So when, of course, you give an honest answer, this is a client of God.
• 21:42
  SPEAKER_01: Okay, they'll be like, okay, once you get to this threshold, then we can talk.
• 21:46
  SPEAKER_01: And some will ask you about their potential.
• 21:49
  SPEAKER_01: So what's the minimum investment amount for your money market? 5,000.
• 21:53
  SPEAKER_01: And in that potential, these bidders can invest a million, two million in a money market fund.
• 21:58
  SPEAKER_01: But they'll start with that 5,000, which is the minimum investment amount.
• 22:00
  SPEAKER_01: They'll wait for maybe a month or so that we can draw it.
• 22:04
  SPEAKER_01: They confirm actually the process is working.
• 22:06
  SPEAKER_01: Then you see that now they're willing to dip their feet.
• 22:10
  SPEAKER_01: Start increasing the amount entirely, 50,000, 100,000.
• 22:15
  SPEAKER_01: And then as you're hitting milestones, the number of clients is increasing.
• 22:20
  SPEAKER_01: They can hear about you somewhere else through a referral, and they become more confident.
• 22:25
  SPEAKER_01: Those were challenges, especially toward the tail end of two and maybe your fifth.
• 22:30
  SPEAKER_01: Second quarter of 2023.
• 22:32
  SPEAKER_01: But now, where we've gotten, to be honest, those challenges have really become fewer.
• 22:36
  SPEAKER_01: Because one, someone can see you've been there progressively.
• 22:40
  SPEAKER_01: The returns are consistent and solid.
• 22:42
  SPEAKER_01: You're able to explain exactly the hours and the returns.
• 22:44
  SPEAKER_01: And if not that team, there are a thousand similar people like ourselves who have invested with you.
• 22:50
  SPEAKER_01: Then, of course, that gives them confidence to trust you even more.
• 22:54
  SPEAKER_00: And so like when your journey to 1 billion,
• 22:56
  SPEAKER_00: I'm wondering at what point do you cross that threshold from we don't know you,
• 23:01
  SPEAKER_00: we can't trust you.
• 23:02
  SPEAKER_00: At what point do you feel that?
• 23:04
  SPEAKER_01: For us, we crossed that during our launch.
• 23:07
  SPEAKER_01: Kooza was launched November last year, and we had the senior board chair who was our chief guest then.
• 23:13
  SPEAKER_01: And our aspect under management then was around $600 million.
• 23:17
  SPEAKER_01: So after the launch,
• 23:19
  SPEAKER_01: it was now clear not just to the senior management at Kooza and the board,
• 23:25
  SPEAKER_01: even the clients who had come in and even the prospects.
• 23:28
  SPEAKER_01: it was clear to them that this is a story that is taking shape.
• 23:31
  SPEAKER_01: And that's now confidence, being the confidence that has been portrayed in the company.
• 23:35
  SPEAKER_00: Give a pitch to the people who are listening and who are also seeking to invest.
• 23:38
  SPEAKER_00: You can tell them, what do you offer that is different and distinct?
• 23:41
  SPEAKER_00: What's your value proposition to people who come to you and how can they find you?
• 23:44
  SPEAKER_01: It's a good question.
• 23:45
  SPEAKER_01: The first thing is just making sure that there's no money sitting in the bank account.
• 23:49
  SPEAKER_01: So if you have a bank account, you must have a money market account.
• 23:53
  SPEAKER_01: And your call account should be a cool money market account.
• 23:57
  SPEAKER_01: For diversification,
• 23:58
  SPEAKER_01: you can consider if for 800 times you have dollar needs to outboard the Kenya
• 24:03
  SPEAKER_01: Shilling money market fund and the dollar money market fund.
• 24:07
  SPEAKER_01: Our returns are complete from a risk standpoint.
• 24:11
  SPEAKER_01: Our money market fund, Kenya Shilling, is earning 17.53.
• 24:14
  SPEAKER_01: That's the rate that we created today.
• 24:17
  SPEAKER_01: And our returns
• 24:18
  SPEAKER_01: Money market dollar is yielding 7.05.
• 24:21
  SPEAKER_01: That's today's rate.
• 24:22
  SPEAKER_01: Very competitive.
• 24:23
  SPEAKER_01: And the good thing is that you leave money whenever you need it.
• 24:27
  SPEAKER_01: Within two days, that's 48 hours, you'll get it in your bank account.
• 24:31
  SPEAKER_01: You don't have to talk to anyone.
• 24:32
  SPEAKER_01: You just get a profit on your phone through, say, an app or a client portal, and you'll get your funds.
• 24:41
  SPEAKER_01: So that's for basically short term.
• 24:44
  SPEAKER_01: Then for someone who has some bit of patience,
• 24:47
  SPEAKER_01: you're looking for something that can beat then these returns of 15% over a longer
• 24:54
  SPEAKER_01: period of time where you look at a horizon.
• 24:57
  SPEAKER_01: of anywhere between three to five years, we pitched in and called an environmental fund.
• 25:02
  SPEAKER_01: And like I say, the performance of our environmental fund has been very strong.
• 25:05
  SPEAKER_01: The first four months, now almost five months of the year, it's done about 40%.
• 25:10
  SPEAKER_01: And it's because we saw that last year the Kenyan equity market was overhauled.
• 25:16
  SPEAKER_01: There was an opportunity for the Kenyan equity markets to over, so we went over and that's bearing fruit.
• 25:22
  SPEAKER_01: And just like the name Momentum, for one
• 25:25
  SPEAKER_01: We believe we will meet the equity opportunity.
• 25:28
  SPEAKER_01: We'll be rotating out of the equity in favor of fixed income because we believe as
• 25:32
  SPEAKER_01: we go to next year,
• 25:33
  SPEAKER_01: these rates will come up.
• 25:34
  SPEAKER_01: And of course, we know there's that inverse relationship between bond values and energy.
• 25:37
  SPEAKER_01: As the rates come up, of course, the price of these bonds are going up.
• 25:41
  SPEAKER_01: And we believe this such strong performance that has been registered by the maker
• 25:45
  SPEAKER_01: from this year should be.
• 25:47
  SPEAKER_01: something that we should be able to carry on to next year.
• 25:49
  SPEAKER_01: So then for a patient you've worked for three,
• 25:51
  SPEAKER_01: four,
• 25:52
  SPEAKER_01: you can't even remember the last time you received a statement from one of the employers.
• 25:56
  SPEAKER_01: We can help you consolidate your patient into our individual patient plan and you
• 26:01
  SPEAKER_01: will be coming in at a good time because the benefits are being invested.
• 26:06
  SPEAKER_01: At the current high rate that the government is offering,
• 26:11
  SPEAKER_01: even on a reporting basis,
• 26:13
  SPEAKER_01: as opposed to most typical motorway employers who,
• 26:17
  SPEAKER_01: I mean,
• 26:17
  SPEAKER_01: those settlements never come.
• 26:19
  SPEAKER_01: Those are some of the weaknesses that we are exploiting.
• 26:22
  SPEAKER_01: For us,
• 26:22
  SPEAKER_01: we make sure on a regular basis,
• 26:26
  SPEAKER_01: actually every three months,
• 26:27
  SPEAKER_01: you'll be receiving your pension statement and just from a click of the phone.
• 26:32
  SPEAKER_01: So just from a mobile or a plant portal,
• 26:35
  SPEAKER_01: you should be able to see directly your patient after pretending on a regular basis.
• 26:41
  SPEAKER_01: For those clients who don't want to be smoked,
• 26:44
  SPEAKER_01: um we'll be able to download and come up with a portfolio that meets your
• 26:51
  SPEAKER_01: objectives and of course within your risk capital and we if for instance you'd want
• 26:57
  SPEAKER_01: us to trade our bonds for you who have some exposure in offshore for you we can
• 27:02
  SPEAKER_01: always do that through our private world management
• 27:05
  SPEAKER_01: And for the unique opportunity, for instance, you'd want to, say, access zero bonds.
• 27:09
  SPEAKER_01: You're going to access zero bonds through oil.
• 27:10
  SPEAKER_01: Or you'd want then,
• 27:12
  SPEAKER_01: as opposed to buying bonds from the second-hand market,
• 27:15
  SPEAKER_01: whereby maybe you don't have the economy of scale.
• 27:17
  SPEAKER_01: You may not be able to negotiate for price very competitively.
• 27:20
  SPEAKER_01: We can already do that for you as well through our private world money.
• 27:24
  SPEAKER_01: That will be my pitch.
• 27:25
  SPEAKER_00: Thank you so much.
• 27:26
  SPEAKER_00: So a few questions have come in.
• 27:28
  SPEAKER_00: One is there's something you didn't touch on,
• 27:30
  SPEAKER_00: which was the difference between the management from the CMA side and what needs to
• 27:35
  SPEAKER_00: be handled by RBA.
• 27:36
  SPEAKER_00: So you can say that and then answer this question on how your relationship with CMA
• 27:40
  SPEAKER_00: has been so far in terms of business.
• 27:42
  SPEAKER_00: That's the second question.
• 27:43
  SPEAKER_00: And then the third question,
• 27:45
  SPEAKER_00: which I would add myself,
• 27:46
  SPEAKER_00: is a couple of people I think have been burned in a few of the...
• 27:51
  SPEAKER_00: management companies are out there.
• 27:53
  SPEAKER_00: I think one has been known to maybe withhold funds for a while from customers
• 27:57
  SPEAKER_00: because of the challenges they had during COVID.
• 27:59
  SPEAKER_00: And given all that context,
• 28:01
  SPEAKER_00: then what's your assurance to clients and to potential clients that yes,
• 28:06
  SPEAKER_00: they can access their funds when needed and that they would not have to go through
• 28:10
  SPEAKER_00: lengthy code processes to get their funds back from you?
• 28:12
  SPEAKER_01: So the difference between EMEA and RBA is that
• 28:17
  SPEAKER_01: For you to actually be given the RBA license, you must have first gotten the CMLS.
• 28:22
  SPEAKER_01: Then the main risk is really the capital market security.
• 28:26
  SPEAKER_01: So the capital market security mostly then oversees collection investment schemes for the markets.
• 28:31
  SPEAKER_01: And then you're doing these fund management services as well.
• 28:34
  SPEAKER_01: So that's for CRL and the capital market security.
• 28:37
  SPEAKER_01: RBA only deals with retirement benefits.
• 28:40
  SPEAKER_01: So this will be like, for instance, the individual patient plan, the umbrella patient plan.
• 28:47
  SPEAKER_01: The point of interactions,
• 28:49
  SPEAKER_01: you find that you interact more with the CME than the IRB because like you can see,
• 28:56
  SPEAKER_01: we have most of our products are really under IRB and CME.
• 29:01
  SPEAKER_01: But across all of our products, we have a lot of products that are under IRB.
• 29:06
  SPEAKER_01: The two regulators, on a quarterly basis, you must report back to them on their specific product.
• 29:12
  SPEAKER_01: And then you're subjected to a regular check.
• 29:14
  SPEAKER_01: For instance,
• 29:15
  SPEAKER_01: both IB and CMA,
• 29:17
  SPEAKER_01: every two years,
• 29:20
  SPEAKER_01: they come and inspect and just make sure that whatever you normally report on a
• 29:24
  SPEAKER_01: quarterly basis,
• 29:25
  SPEAKER_01: indeed,
• 29:27
  SPEAKER_01: what's happening on the ground.
• 29:29
  SPEAKER_01: The question on how I've been in our relationship with the CMA, I can say it's very good.
• 29:33
  SPEAKER_01: And CMA, they're not just saying it, that they're keen to deepen this market.
• 29:38
  SPEAKER_01: They're actually working their talk.
• 29:40
  SPEAKER_01: Like, we were pleasantly surprised how fast they first struck our legacy.
• 29:44
  SPEAKER_01: When we went for a CMA license, like I said, we placed an application before the CMA.
• 29:50
  SPEAKER_01: It was the tail end of the month, that's December, and by the end of April 2022, they'd given our
• 29:56
  SPEAKER_01: And I said, yeah, so they are very supportive.
• 29:59
  SPEAKER_01: And also even for product approval and even picking feedback from the market, they're very supportive.
• 30:04
  SPEAKER_01: Of course,
• 30:04
  SPEAKER_01: no regulator is perfect,
• 30:06
  SPEAKER_01: but there is always that friction between market participants and regulators,
• 30:11
  SPEAKER_01: wherever market participants would want to move faster.
• 30:14
  SPEAKER_01: compared to a regulator, but how we've worked with FEMA this far, the relationship has been very good.
• 30:20
  SPEAKER_01: Then the other question was, how different are we and what sort of assurance can we give?
• 30:26
  SPEAKER_01: If you look at, for instance, the FEMA product, these are structures.
• 30:30
  SPEAKER_01: So you have, we're the sponsor of this Unitrust product and we're the fund manager.
• 30:35
  SPEAKER_01: Then these are trustees.
• 30:36
  SPEAKER_01: So the trustee for our Unitrust product is a cooperative person.
• 30:41
  SPEAKER_01: And the custodian is KCB Bank.
• 30:44
  SPEAKER_01: And the responsibility of the trustee is to ensure the interest of all these unit
• 30:49
  SPEAKER_01: holders is really taken care of and protected.
• 30:52
  SPEAKER_01: And like unit trusts, there are key limits within which they must be invested.
• 30:57
  SPEAKER_01: So you must make, for example, observe single initial at 85%.
• 31:02
  SPEAKER_01: A related party can't be more than 10%, although it must be observed.
• 31:06
  SPEAKER_01: And the person to ensure that is being done,
• 31:08
  SPEAKER_01: of course,
• 31:09
  SPEAKER_01: with the fund manager,
• 31:09
  SPEAKER_01: the pipeline of defense,
• 31:11
  SPEAKER_01: the trustee has to make sure that it's happening on a quarterly basis because we
• 31:15
  SPEAKER_01: have quarterly meetings with the trustee.
• 31:16
  SPEAKER_01: And all these reports.
• 31:17
  SPEAKER_01: are also shared with the regulator.
• 31:19
  SPEAKER_01: That's on a quarterly basis.
• 31:21
  SPEAKER_01: For regulated products,
• 31:22
  SPEAKER_01: and that would encourage more investors,
• 31:25
  SPEAKER_01: you should be going for regulated products.
• 31:27
  SPEAKER_01: And even for the cases we've talked about, that wasn't a regulated product.
• 31:32
  SPEAKER_01: I guess I'll leave it at that.
• 31:34
  SPEAKER_01: Just make sure that you're only investing in regulated products.
• 31:37
  SPEAKER_01: And if then you have this appetite to go private work,
• 31:41
  SPEAKER_01: make sure you understand what exactly you're getting into.
• 31:43
  SPEAKER_01: Because like our private wealth management, we only touch bonds.
• 31:47
  SPEAKER_01: So we are looking at, for instance, with euro bonds and where we invest in infrastructure bonds.
• 31:52
  SPEAKER_01: It doesn't mean a government can default because we've had cases of Ghana,
• 31:57
  SPEAKER_01: we've had cases of Ethiopia,
• 31:59
  SPEAKER_01: Zambia,
• 32:01
  SPEAKER_01: Sri Lanka.
• 32:02
  SPEAKER_01: But you must make sure that then the fund manager explains to you that they...
• 32:08
  SPEAKER_01: that are involved and your satisfaction so as you're making the decision it's an
• 32:12
  SPEAKER_00: informed very important many questions coming through for you so let's see the next
• 32:18
  SPEAKER_00: one is about do you do any financial literacy trainings to get people to understand
• 32:22
  SPEAKER_00: better your product and there is also someone asking about do you invest in
• 32:26
  SPEAKER_00: anything else maybe tech aside away from tech what else do you invest in
• 32:32
  SPEAKER_00: And then there was one here I was asking whether you were going to lift at some point,
• 32:36
  SPEAKER_00: maybe a dentist or something.
• 32:37
  SPEAKER_00: Or would you ever go public and have an IP?
• 32:39
  SPEAKER_00: People want to invest in your company.
• 32:41
  SPEAKER_00: Right.
• 32:41
  SPEAKER_00: Okay.
• 32:41
  SPEAKER_01: Now, between the questions, the first question was around the training.
• 32:46
  SPEAKER_00: You can start with the training question first.
• 32:48
  SPEAKER_00: You do training to get people to understand your product.
• 32:52
  SPEAKER_01: Very good.
• 32:52
  SPEAKER_01: Opportunity is actually empowering than the selling.
• 32:56
  SPEAKER_01: So for us, I'm also giving back to society.
• 33:02
  SPEAKER_01: We are keen to partner with universities and especially target the 10th year
• 33:07
  SPEAKER_01: students and 14th year students just before they break into college.
• 33:11
  SPEAKER_01: the job market to be equipped with basic about investing.
• 33:16
  SPEAKER_01: So already last year,
• 33:18
  SPEAKER_01: we had such two trainings,
• 33:19
  SPEAKER_01: University of Nairobi,
• 33:21
  SPEAKER_01: Catholic University,
• 33:22
  SPEAKER_01: something that we'd want to continue doing because
• 33:25
  SPEAKER_01: We believe the only way we can change the current setting of development culture in
• 33:31
  SPEAKER_01: Kenya is through financial literacy.
• 33:33
  SPEAKER_01: We also get into organized training.
• 33:36
  SPEAKER_01: So you'd find the main organized training and we're invited and facilitated and we
• 33:41
  SPEAKER_01: go and impart knowledge.
• 33:43
  SPEAKER_01: So for the organized training,
• 33:45
  SPEAKER_01: training,
• 33:45
  SPEAKER_01: of course we do it,
• 33:46
  SPEAKER_01: but the ones that we're taking on initiative and giving back to society is what
• 33:50
  SPEAKER_01: we're doing with universities and something.
• 33:53
  SPEAKER_01: These are investors for the future,
• 33:55
  SPEAKER_01: maybe future KUZA clients,
• 33:56
  SPEAKER_01: but even if they don't invest with KUZA,
• 33:59
  SPEAKER_01: we know we've made someone be better than they would have been by just having an
• 34:04
  SPEAKER_01: adult class.
• 34:06
  SPEAKER_00: The question is about, maybe I can change it a bit now.
• 34:08
  SPEAKER_00: I think this person is specifically asking what you invest in.
• 34:12
  SPEAKER_00: Take aside,
• 34:12
  SPEAKER_00: but I think you can give them maybe a quick brief on some of the asset classes that
• 34:16
  SPEAKER_00: you invested in.
• 34:17
  SPEAKER_01: What we invest in varies from one product to the other.
• 34:22
  SPEAKER_01: So for example,
• 34:23
  SPEAKER_01: money market funds,
• 34:24
  SPEAKER_01: you must make sure that for it to be that liquid,
• 34:26
  SPEAKER_01: whereby someone,
• 34:28
  SPEAKER_01: whenever they want their money,
• 34:29
  SPEAKER_01: they have to pay it within two working days.
• 34:32
  SPEAKER_01: It must be invested as near cash.
• 34:34
  SPEAKER_01: possible, and actually these are regulations by the CME that are related to tenure.
• 34:40
  SPEAKER_01: So all these investments that he's invested in,
• 34:42
  SPEAKER_01: if you look at the type of maturity and you weight that against how much you've
• 34:47
  SPEAKER_01: invested in,
• 34:48
  SPEAKER_01: it should be more than 18 months.
• 34:51
  SPEAKER_01: So you'd find that our money market funds, a trillion is invested predominantly in deposits and banks.
• 34:57
  SPEAKER_01: invested in short-term bonds, then also invested in commercial paper.
• 35:03
  SPEAKER_01: So we do a bit of commercial papers and these have to be to micro-lenders,
• 35:08
  SPEAKER_01: but the commercial paper has to be retained.
• 35:11
  SPEAKER_01: And from where we sit, we must be convinced that the risk of default can really be mitigated.
• 35:16
  SPEAKER_01: Like for instance, we don't touch micro-lenders who are balance sheet below $2 billion.
• 35:21
  SPEAKER_01: who haven't reported profit in the most recent three years and who have done
• 35:25
  SPEAKER_01: performing loan book as a percentage of the entire loan book is more than 20%.
• 35:31
  SPEAKER_01: So that's for money markets and shilling.
• 35:34
  SPEAKER_01: So then for dollar, we invest in Eurobon.
• 35:37
  SPEAKER_01: Like for instance,
• 35:38
  SPEAKER_01: the Kenyan Eurobon maturing next month and the one maturing in 2027,
• 35:42
  SPEAKER_01: our fund has invested in the two Eurobon certain deposits.
• 35:46
  SPEAKER_01: as well, and also donor-building commercial paper.
• 35:51
  SPEAKER_01: So fixed income funds, they are predominantly bonds, and we're going long-term, and deported.
• 35:58
  SPEAKER_01: Momentum funds,
• 35:58
  SPEAKER_01: we invest in equities,
• 36:00
  SPEAKER_01: so the fund is at the top of the notebook,
• 36:03
  SPEAKER_01: so you can invest in equities,
• 36:05
  SPEAKER_01: you can invest in fixed income,
• 36:07
  SPEAKER_01: so right now we are very constructive about getting back to the free of the allocation,
• 36:12
  SPEAKER_01: it's more than 60%,
• 36:12
  SPEAKER_01: but as
• 36:14
  SPEAKER_01: Of course, we start taking profits.
• 36:16
  SPEAKER_01: The plan is to take two interest-bearing assets and the fund can also invest in offshore.
• 36:21
  SPEAKER_01: It can invest in offshore equities.
• 36:23
  SPEAKER_01: It can also invest in offshore fixed income.
• 36:26
  SPEAKER_01: Broadly, those are the investments that we invest in.
• 36:29
  SPEAKER_01: As of now, we don't invest in property and we don't do any crypto.
• 36:35
  SPEAKER_00: Not yet.
• 36:36
  SPEAKER_00: Somebody is wondering how you get working capital and how did you convince the
• 36:40
  SPEAKER_00: first investors to invest in you?
• 36:41
  SPEAKER_00: Maybe you can recap that quickly.
• 36:43
  SPEAKER_00: So how you get your working capital day to day?
• 36:45
  SPEAKER_00: How do you make money, by the way?
• 36:47
  SPEAKER_00: Why are you managing people's money, but how do you make money?
• 36:49
  SPEAKER_00: And in that regard also,
• 36:50
  SPEAKER_00: I think you could talk about the fees for some of the products so that people can
• 36:53
  SPEAKER_00: be aware of that.
• 36:54
  SPEAKER_01: Our unit trust product, we charge 2%.
• 36:57
  SPEAKER_01: Money market cash flow,
• 36:58
  SPEAKER_01: money market dollar,
• 37:00
  SPEAKER_01: fixed income funds,
• 37:01
  SPEAKER_01: momentum funds,
• 37:02
  SPEAKER_01: both Sharia and non-Sharia,
• 37:04
  SPEAKER_01: 2% management fee.
• 37:06
  SPEAKER_01: Then for our patient product, our individual patient plan, the fee is 1.5%.
• 37:13
  SPEAKER_01: And for umbrella, the fee is 1%.
• 37:17
  SPEAKER_01: Yeah, so that high draft, we make our money.
• 37:20
  SPEAKER_01: But again, just saying that Kooza, we are funded 23 to 1.
• 37:23
  SPEAKER_01: So as the assets grow, the revenue will get to a point whereby it pays all the expenses.
• 37:29
  SPEAKER_01: But the good thing is that the shareholders of Kooza put in on a good company.
• 37:33
  SPEAKER_01: So then it's sustaining the company up until the company is break-even.
• 37:36
  SPEAKER_01: So based on our projection, brother, this is the last year that the company will be loss-making.
• 37:41
  SPEAKER_01: But as for next year, the company will be profitable.
• 37:44
  SPEAKER_01: Like the target...
• 37:45
  SPEAKER_01: The fund management that we expect to close is around $2 billion, potentially.
• 37:50
  SPEAKER_01: And we have a target of hitting at least $10 billion, potentially, by the end of 2025.
• 37:57
  SPEAKER_01: But as we hit $2 billion at the fund management, at the company's task force,
• 38:01
  SPEAKER_00: And then, has it been your deliberate efforts to drive the company towards break-even?
• 38:07
  SPEAKER_00: And have you done any fundraising in terms of building up the asset management company?
• 38:11
  SPEAKER_00: Didn't have to do,
• 38:13
  SPEAKER_01: frankly,
• 38:13
  SPEAKER_01: a second round of fundraising because the capital that was put in at the beginning
• 38:17
  SPEAKER_01: is actually more proficient to see the company up until break-even because we got
• 38:22
  SPEAKER_01: commitments from shareholder.
• 38:24
  SPEAKER_01: So then we keep on doing capital call.
• 38:27
  SPEAKER_01: And based on how exactly the company is performing,
• 38:31
  SPEAKER_01: We may not call all the capital that was committed by the Shell.
• 38:35
  SPEAKER_01: Maybe at best we'll call like 70% of that capital.
• 38:38
  SPEAKER_00: And what is your deliberate goal to drive towards breakeven there?
• 38:42
  SPEAKER_00: Yeah,
• 38:42
  SPEAKER_00: the company,
• 38:43
  SPEAKER_00: the reason why I asked that is for the past year or so,
• 38:45
  SPEAKER_00: there are several startups that I've found or gone under because of the low
• 38:48
  SPEAKER_00: interest area of the past 10 or so years,
• 38:51
  SPEAKER_00: they have been addicted to raising capital,
• 38:53
  SPEAKER_00: constantly raising capital.
• 38:54
  SPEAKER_00: And now for you, you can say that you've not even had to call up all the capital that was raised.
• 38:59
  SPEAKER_00: What makes you different in terms of your approach to asset management and both running a startup?
• 39:05
  SPEAKER_01: Okay, it's a good question.
• 39:06
  SPEAKER_01: So the shareholders who came on board, they came on board on the strength of the business plan for them.
• 39:13
  SPEAKER_01: And so they constantly have money to account to deliver as part of the business plan.
• 39:18
  SPEAKER_01: There are two milestones that we have to unlock to be able to access more capital.
• 39:24
  SPEAKER_01: So as much as, of course, the targets are not cast on, but the business plan was a very good guide.
• 39:29
  SPEAKER_01: And we are working on it.
• 39:30
  SPEAKER_01: For the business plan, some targets were ahead of the business plan.
• 39:34
  SPEAKER_01: Some we are maybe lagging behind.
• 39:37
  SPEAKER_01: But as regards to profitability, we're actually ahead of the business plan.
• 39:41
  SPEAKER_01: So I think what might be different between maybe one company to the other is how
• 39:47
  SPEAKER_01: realistic was the business plan.
• 39:48
  SPEAKER_01: Was the business plan based on our too aggressive target that when you subject it
• 39:53
  SPEAKER_01: to reality,
• 39:54
  SPEAKER_01: those are unattainable?
• 39:56
  SPEAKER_01: And I think we were quite conservative in regards to our targets and that is making
• 40:01
  SPEAKER_01: it easier for us to get to our goal even ahead of time.
• 40:04
  SPEAKER_00: Great.
• 40:05
  SPEAKER_00: With exhausted all the questions,
• 40:07
  SPEAKER_00: Tabat,
• 40:07
  SPEAKER_00: you can now print us a picture of,
• 40:09
  SPEAKER_00: I think you had targets until 2027 and all.
• 40:11
  SPEAKER_00: What's your...
• 40:13
  SPEAKER_00: long-term view on what Kooza asset management can be.
• 40:17
  SPEAKER_00: And as you say that also,
• 40:18
  SPEAKER_00: you can invite people on where they can find you,
• 40:20
  SPEAKER_00: maybe on the app,
• 40:21
  SPEAKER_00: on Twitter and all this social media platform,
• 40:24
  SPEAKER_00: and how they can reach out to you to be able to be part of your investing journey
• 40:27
  SPEAKER_00: at Kooza.
• 40:28
  SPEAKER_00: You should tell us why Kooza by the name Kooza.
• 40:32
  SPEAKER_00: We didn't touch on that.
• 40:33
  SPEAKER_00: Go ahead.
• 40:33
  SPEAKER_00: Actually, I'll start with why Kooza.
• 40:36
  SPEAKER_01: So Kooza is a
• 40:37
  SPEAKER_01: Train before nurture.
• 40:38
  SPEAKER_01: At KUZA, we are nurturing people's financial journey.
• 40:42
  SPEAKER_01: So as you come to us, it doesn't matter where exactly you are in your financial and investment journey.
• 40:48
  SPEAKER_01: We'll be able to nurture it and grow with you up until you get to the destination that you aspire to.
• 40:54
  SPEAKER_01: So that's why we chose the name KUZA.
• 40:57
  SPEAKER_01: Where we see Cura,
• 40:59
  SPEAKER_01: so the Kenyan investment market,
• 41:01
  SPEAKER_01: Kenyan asset management space,
• 41:03
  SPEAKER_01: it's only getting started.
• 41:04
  SPEAKER_01: And I was actually just looking at, frankly, just even look at the unit shop number.
• 41:08
  SPEAKER_01: I think at the end of March, collectively, the industry was at 225 billion Kenyan shillings.
• 41:16
  SPEAKER_01: But then you look at the growth of the connected investment scheme last year,
• 41:21
  SPEAKER_01: the growth was about 50 billion yen.
• 41:23
  SPEAKER_01: At the end of 2023, it was around $150 billion.
• 41:27
  SPEAKER_01: Then it covered up to $215 billion at the end of 2023.
• 41:31
  SPEAKER_01: We haven't seen such growth in many years for this market.
• 41:34
  SPEAKER_01: So there's something that is changing.
• 41:36
  SPEAKER_01: And as the industry is growing, it's not like another asset manager is losing market share.
• 41:43
  SPEAKER_01: There are all streaking drafts in the African-American market.
• 41:47
  SPEAKER_01: Most of this money is the money that was sitting idle in banks.
• 41:51
  SPEAKER_01: We expect,
• 41:52
  SPEAKER_01: for instance,
• 41:52
  SPEAKER_01: a connective investment scheme in the next,
• 41:54
  SPEAKER_01: like Italian,
• 41:55
  SPEAKER_01: to hit like a trillion can see.
• 41:57
  SPEAKER_01: And so if we are looking at $225 billion now to a trillion,
• 42:03
  SPEAKER_01: so you're talking about a potential growth of close to $800 billion.
• 42:06
  SPEAKER_01: And KUZA will...
• 42:09
  SPEAKER_01: Part of that would want to be heavily involved in that.
• 42:11
  SPEAKER_01: And the trick is really pushing the developers to get to financial degree.
• 42:15
  SPEAKER_01: So the next five to 10 years will be predominantly operations will be in Kenya.
• 42:22
  SPEAKER_01: But we're also looking Africa-wide.
• 42:25
  SPEAKER_01: The same opportunities that are available in Kenya, we see them elsewhere.
• 42:29
  SPEAKER_01: The markets that are even younger than Kenya.
• 42:31
  SPEAKER_01: So Ethiopia is only opening up.
• 42:34
  SPEAKER_01: South Sudan, they're yet to get the app together.
• 42:37
  SPEAKER_01: We have...
• 42:38
  SPEAKER_01: Somalia, we have DLP.
• 42:41
  SPEAKER_01: Those are markets we are looking at.
• 42:42
  SPEAKER_01: And because in 10, 15, 20 years, we'd want Kora to have a footfall in all those markets.
• 42:49
  SPEAKER_01: I think Mukai at this point,
• 42:50
  SPEAKER_01: I thank all the business for sparing their time to listen to me and encourage them
• 42:56
  SPEAKER_01: to actually implement some of the discussions and the ideas that we've shared today.
• 43:01
  SPEAKER_01: And if then you'd want to come to Kooza Finance Bank,
• 43:04
  SPEAKER_01: like I said,
• 43:05
  SPEAKER_01: more than 80% of our customers haven't even come to our office,
• 43:08
  SPEAKER_01: but you're still welcome to come to our office.
• 43:10
  SPEAKER_01: So you can go to your phone,
• 43:13
  SPEAKER_01: Play Store,
• 43:13
  SPEAKER_01: App Store,
• 43:14
  SPEAKER_01: search for Kooza.Africa,
• 43:17
  SPEAKER_01: and start your self-onboarding journey.
• 43:20
  SPEAKER_01: Our offices are along 3rd and Long Avenue.
• 43:24
  SPEAKER_01: That's in Upper Hill, Tower, or 12th Floor.
• 43:28
  SPEAKER_01: That's where we are from.
• 43:30
  SPEAKER_01: Back to you, Bokhaya.
• 43:31
  SPEAKER_01: We see everyone.
• 43:32
  SPEAKER_01: Good evening and thank you so much.
• 43:34
  SPEAKER_00: Thank you so much.
• 43:35
  SPEAKER_00: A couple of questions that are coming,
• 43:37
  SPEAKER_00: we'll send them to you and then you can answer them on the timeline.
• 43:41
  SPEAKER_00: I see one on Emma Kiba and the impact it may have on the future of asset management.
• 43:46
  SPEAKER_00: Thank you for joining us this evening on Mongo Spaces.
• 43:49
  SPEAKER_00: Join us again next week.
• 43:51
  SPEAKER_00: We'll have more discussions for you.
• 43:53
  SPEAKER_00: So congrats to Kooza, especially for getting to $1 billion.
• 43:56
  SPEAKER_00: We hope and pray that you get to $2 billion by the end of this year, as you said.
• 44:00
  SPEAKER_00: And by 2027, you'll get to that $10 billion.
• 44:03
  SPEAKER_00: And who knows, soon you may be celebrating $1 billion, not Kenya's shillings alone.
• 44:07
  SPEAKER_00: So congrats, James, for taking the bold steps to launch your own asset management company.
• 44:11
  SPEAKER_00: And thank you for joining us, taking time to come and answer our questions.
• 44:15
  SPEAKER_00: If you have any questions, James is always available on the Kooza Asset Management Twitter handle.
• 44:21
  SPEAKER_00: Just follow them and make sure to ask the questions to them.
• 44:24
  SPEAKER_00: He's very open in terms of answering the questions because as you can see,
• 44:28
  SPEAKER_00: he's been able to come in and answer many questions and do,
• 44:30
  SPEAKER_00: I think really
• 44:32
  SPEAKER_00: that are critically about investing for the long term.
• 44:34
  SPEAKER_00: That's our aim here at Mungo Capital,
• 44:36
  SPEAKER_00: to bring you a good conversation that will challenge you to be able to invest for
• 44:40
  SPEAKER_00: yourself and for the future.
• 44:41
  SPEAKER_00: I think that's very important.
• 44:43
  SPEAKER_00: Don't let the money lie idle in the bank account.
• 44:46
  SPEAKER_00: Come, put it in good use, then as you heard, you can actually get them some of the money very quickly.
• 44:51
  SPEAKER_00: The liquidity is quite high, as James has told us.
• 44:56
  SPEAKER_00: So once again, thank you so much, Jeff, for joining us today.
• 44:59
  SPEAKER_00: Hope to have you again soon.
• 45:00
  SPEAKER_00: And definitely we wish you the best in your journey to building Kooza.
• 45:03
  SPEAKER_00: Santisara for the rest of you for joining us this evening.
• 45:06
  SPEAKER_00: I'll see you again next week for other conversations.