Xeno assets jump to Shs8bn

Number of investors almost reach 1, 000 in just three years of business 

Kampala, Uganda | JULIUS BUSINGE | XENO Investment Management Limited has reported a Shs8bn as assets under its management for the year ended December 2019, signaling a growing interest in equity investments among the population.

Aeko Ongodia, the founder and chief executive officer at Xeno said during the virtual Annual General Meeting held in Kampala on Oct.26 that the company recorded 164% growth in assets to Shs8billion from Shs3.3billion in 2018.

After starting operations three years ago, Xeno has been receiving money from members of the public and investing it on their behalf in different asset classes across the East African region. The investors earn a return on their money per year depending on the company’s performance.

Ongodia said the average yields (revenues) on the money market business segment increased from Shs28million in 2018 to Shs79.5million last year.

The company’s total costs for money market segment increased from Shs7.9million to 19.9million in the period under review, largely attributed to service provider fees.

Profit to unit holders/investors jumped from Shs20million to approx.Shs60million.

On the other hand, investments under the same segment grew from Shs408million in 2018 to Shs1billion in 2019 as equity and liabilities increased from Shs423million to Shs1.1billion during the same period under review.

Bond funds had their yield (revenue) grow from Shs244million in 2018 to Shs618milion last year and costs grow from Shs56.2million Shs130million. Profit for unit holders/investors increased from Shs188million in 2018 to Shs488million in 2019.

Similarly, investments increased from Shs2.3bn in 2018 to Shs5.9bn in 2019 and so are the total assets and liabilities that grew from Shs2.3bn to Shs5.9bn in the period under review.

However, returns for the domestic funds dropped to -13.2% (Shs52.1m) in 2019 from 15.6% (4.9m) in 2018 as costs went up from Shs8.2million to Shs14.2million.

In relation to regional equity funds, yields were recorded as 39.10% (Shs151m) in 2019 compared to -7.50% (minus Shs36.3m) in the previous year.

The key performance drivers for the money markets, according to Ongodia were low inflation (2.9%), robust GDP growth of 5.6% and stable exchange rate.

Meanwhile, the firm noted negative market sentiment on domestic equities, resulting in low demand and low activity.

The lifting of interest rate caps in Kenya resulted in a surge in the regional equities, according to Ongodia.

Innovations for 2020

The firm concluded the year with the ambition to launch the XENO Umbrella Scheme in the first quarter of 2020 to enable employers to extend retirement benefits to their employees without the need to setup an expensive standalone retirement benefits scheme. Using the current XENO platform, employers will be able to setup a retirement’s scheme in a few clicks, according to Ongodia.

He added that, in 2020, they aimed to become the first company in the world to offer goal-based investment advice and management via USSD.

By enabling access to the XENO platform via USSD, Ongodia said it gives a unit holder the ability to setup an account, fund it, and monitor the performance of their investments without connecting to the internet.

On a daily, Xeno executives facilitates a person/investor to think through their financial dreams and recompose them into achievable goals with timelines.

It also guides investors on developing a customised plan for achieving their investment goals. It also builds and provides the technology to achieve investment goals.

“We are the only fund manager where all clients have a free personalised investment plan to achieve their goals,” Ongodia said.

He said, majority (93%) of their clients do not withdraw their funds. By press time, the firm had 978 investors (unit holders), 10% of that figure are institutions.

Going forward, Ongodia said, investors should be positive about future returns given that their company upholds high-end corporate governance principles on top of being highly regulated by Capital Markets Authority (CMA) and Uganda Retirement Benefits Regulatory Authority (URBRA).

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