Co-op Trust exceeds Sh384billion in assets under management

Co-op Trust Investment Services Limited (CISL) is now the second Largest Fund Manager in East Africa, managing in excess of KSh 384 billion in assets under management.

This illustrates a steady increase from the Ksh 218.38 billion assets it managed as of April last year and Ksh 196.47 billion in 2023.

CISL, which is wholly owned by the Co-operative Bank of Kenya, targets high net worth individuals or organisations who have short to medium (periodic or lump sum term) funds that require to be invested for short and/or fixed periods of time.

The service is designed to take into account the unique cash flow profile of the individuals or organisation,
the need to ensure moderate to low investment risk, and the unique cash flow profile.

The investments in this product are designed to match the projected cash flow profile of the client. Common tools used include a mix between treasury bonds and term deposits, pre-negotiated short-term funding arrangements with banks, and other cash flow management tools.

An individual or organisation may from time to time find itself holding an excess cash position. The excess cash position may be subject to the following characteristics:

• The cash held might be needed on short notice or upon expiry of a given period/term
• The funds should not be subjected to any capital risk
• The volume and schedule of drawdowns is unpredictable or uncertain
• The funds can nonetheless be invested to optimize short term gains

For a client in this situation, wealth management can ensure that the return maximization objective is achieved while ensuring the above objectives are respected.

This service is structured to ensure that the investments are moderate to low risk through ensuring that the portfolio of investments is well-diversified, invested in risk-free securities and that an Investment Manager takes personal responsibility for monitoring the portfolio and adhering to pre-agreed risk management measures with the client.
Investment Approach

CISL concentrates on fixed income investment on Interest-Bearing Assets (including Call Deposits, Fixed Deposits, Corporate Bonds & Kenya Government Bonds) which ensure that the principle amount invested is not eroded by the volatility of the market. These assets also earn interest which serves as additional income to the fund.
In addition, these assets are liquid and can be easily traded in the secondary market to make some capital gains.

​​The funds will be invested in a portfolio of government bonds/interest-bearing assets. These are risk-free investments as the principal and interest repayments are guaranteed by the government.

An active trading approach coupled with careful management of the portfolio duration and interest rates will ensure the fund realises capital gains, in addition to the regular interest income.

Fund liquidity will be guaranteed as these securities are quoted on the Nairobi Stock Exchange (also in the event that the client wants some exposure in Equities), meaning they can easily be sold off to realize cash as and when the need arises. Our status as a large Fund Manager will ensure we achieve economies of scale when buying or selling the securities, and when negotiating brokerage commissions.

The benefits to the client include:

• Ensuring adequate cash to meet payment obligation as they fall due, especially after the expiry of the term
• The Wealth Management Fund may be used as collateral (security) in case the client would want a loan facility with any bank
• Facilitates optimal investment of surplus cash and the investment income could form an important source of revenue to the client
• Allows for asset-liability modeling that ensures appropriate liquid assets are held which minimises the probability of insolvency
• There are economies of scale and minimize costs as investments are made in the pool

Joining requirements are as follows:

• Execution of the Discretionary Investment Management Agreement
• Execution of the fee agreement
• Execution of a Deed of Adherence
• Submission of the deposit cheques as seed investment in the plan

All the above are processed by CISL and forwarded to the client for execution.