Titus Muya firm launches dollar assets investment fund

A firm owned by Family Bank founder Titus Muya and Andia Chakava, a former Old Mutual Asset Management executive, has launched a fund to service investors looking for dollar returns.

Ms Chakava, the Alpha Africa Asset Managers (AAAM)hief executive, said the Kasha USD fund will invest in dollar-denominated fixed income securities.

The Mauritian-registered fund is investing in countries in southern Africa and comes at a time the dollar is strengthening on expectations that interest rates in the US will rise.

Ms Chakava said there is also growing demand for alternative investments from investors who are moving away from sectors that have traditionally had high returns such as the high-end property market where there are signs of a slowdown.

“There are a lot of investors (in this sector) who are looking to de-risk from this market,” she said.

The Kenya Bankers Association (KBA) Housing Price Index, which measures the average home prices, marginally increased in the second quarter of 2015 indicating that the property market is cooling down.

The KBA Housing Price Index increased by 0.2 per cent in the second quarter of the year, slower than the 2.75 per cent jump of the first three months of 2015.

READ: Nairobi loses top spot in increase of luxury home prices

Alpha Africa’s new fund is also targeting investors such as parents who plan to send their children overseas for college education and need to save in dollars.

Industry stakeholders said that dollar investments are handy for local investors seeking returns that are not subject to the shilling’s volatility.

“Dollar-denominated fixed investments are good especially when coming from a place like Kenya where the currency is more likely to weaken than strengthen,” African Alliance Investment Bank chief executive Alistair Gould told the Business Daily.

The shilling has so far shed off 10 per cent of its value to the dollar since the beginning of the year.

Mr Gould added that the dollar investments can also be used by local companies for hedging.

Alpha Africa which was issued with a fund managers’ licence by the Capital Markets Authority, the industry regulator, in September 2013 has Sh5.4 billion in assets under management and has mostly invested in fixed income securities.

The investment firm also has Dhahabu Africa Capital, a private equity wing that is investing in small and mid-size businesses in education, financial services, real estate, agro-processing and tourism sectors.

Ms Chakava said the firm is finalising investments in three companies but could not give finer details on the firms or the investment size until the deals are sealed.

The fund’s investment criteria is to invest between $2 million (Sh200 million) to $10 million (Sh1 billion) per company.