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Abstract:Fund manager Amana capital is seeking to raise $2 million (Sh227.8 million) in the form of debt and/or equity.
Fund manager Amana capital is seeking to raise $2 million (Sh227.8 million) in the form of debt and/or equity.
The firm, which lost Sh275 million or a fifth of its managed funds when Nakumatt Holdings defaulted on its commercial paper, is looking for a consultant to help it raise the money.
It plans to invest the new cash in technology that will transform it into a fully online fund manager.
Acting chief executive Reginald Kadzutu said the firm will develop separate platforms for institutional investors and individual savers.
“This is for digitisation of the fund manager and development of two new platforms, one retail-focused and the other SME focused,” Mr Kadzutu said.
There is a growing shift to online investment services as fund managers seek to cut costs and reach new customers.
The loss from the Nakumatt investment in 2018 led to substantial customer exits from the fund, shrinking its market share and value of managed assets.
Amana, which at one time had Sh1.2 billion, had slipped to Sh37 million at the end of September 2021, controlling only 0.03 percent of unit trust market share.
The fund said it reported the loss to the Capital Markets Authority (CMA) and promised investors that it will use legal means to try and recover the investment.
Nakumatt, however, collapsed with large negative equity and the commercial paper was unsecured. The former giant retailers assets have since been liquidated.
CMA issued a 28-day freeze on the Nairobi-based fund manager to enable the firm to boost its liquidity. The fund later allowed investors to access part of their assets after the freeze.
The company also decided to convert the lost investments into ownership so that customers would reclaim their lost cash as shareholders as the company grows back.
“Amana Capital first year of turnaround was focused internally, sorting out governance, processes and procedures and finally the conversion of unit holders to shareholders,” Mr Kadzutu said.
“Second part is digitizing and repositioning in the market and recapitalization of the business.”
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