The Capital Markets Authority (CMA) has licensed two new fund managers lifting the number of firms in the space to 45.
Meridian Asset Management Limited and Swala Capital Limited are the latest licensees in the fund management business which mirrors the growing demand for professional wealth and asset management services in the country.
CMA has also approved Ndovu Wealth Limited to establish two special funds which bear the same name Kibaba Special Multi-Asset Fund but differ by currency with one being a shilling denominated fund and the other, a dollar fund.
The rise in the number of fund managers has been amid increased interest in investment products offered by the professionals by retail investors including money market funds (MMFs), fixed income funds and special funds which are collectively referred to as unit trusts.
On Tuesday, CMA disclosed the licensing of the two new fund managers and approved two additional special funds under unit trusts.
The two fund managers join Tradiam Investments Services Limited which was licensed as a fund manager earlier this year.
The number of fund managers has grown steadily, jumping from a low of 24 players in 2020, first to 34 in 2022 and 40 in 2023 according to additional data from CMA.
The two special funds meanwhile form part of the approved Taifa Unit Trust umbrella fund.
Special funds are a type of unit trust that offer greater investment flexibility than traditional funds like MMFs by allowing fund managers to invest in a wider range of assets including international markets.
The number of unit trusts has also grown notably in recent years, reaching 55 at the end of last year from 36 in 2023.
Earlier this year, CMA granted GulfCap Investment Bank to establish the Ziidi Shariah MMF.
CMA says the new licenses and approvals are part of the authority’s initiatives aimed at deepening the market and encouraging the entry of diverse players to enhance competition, innovation and investor choice.
“We have seen the assets under management (AUM) for collective investment schemes (unit trusts) surpass Sh400 billion, which is a significant milestone,” CMA chief executive officer Wyckliffe Shamiah said in a statement.
“It underscores the increasing confidence by investors in the capital markets and the importance of fund managers in driving financial inclusion and capital formation.”
The AUM of collective investment schemes hit Sh389.2 billion at the end of December 2024 from Sh215.1 billion a year ago.
The growth in assets for the funds was attributed to the additional funds registered and the heightened interest in money market funds among investors.
CMA also attributed the growth to intensified market efforts by fund managers.
The number of unit trust investors neared the 1.5 million mark at the end of 2024 with the CMA anchoring the growth on increased investor awareness.
“The number of investors in various CIS funds has continued to grow steadily over time, buoyed by increasing awareness in the market to save and invest especially, post-Covid era,” CMA said in a recent report.
“As of December 31, 2024, there were a total of 1,409,343 investors, this represents a seven percent increase from 1,299,300 investors in June 2024.”
