Old Mutual packages alternative investments
Old Mutual Investment Group, a subsidiary of Old Mutual Malawi plc, has established an Alternative Investments Fund to deliver strong returns in a bid to its customers through non-traditional investments.
The fund, which is focusing on infrastructure projects, private equity and agricultural investments, seeks to provide sustainable returns to clients while supporting job creation, financial inclusion and community developments.
In his presentation during the launch of the fund on Thursday evening in Blantyre, Old Mutual Investment Group managing director Mark Mikwamba said the local economy is facing funding issues and deficits in various sectors with only up to 29 percent of the budget allocated to development expenditure in the past 10 years amid persistent fiscal deficits.
He said: “This is telling us of the clear constraints to accommodate all development expenditures the country requires. Clients are looking for returns, but we are seeing a concentrated market, 73 percent of the stock market is just a few counters, with three banks making up to 37 percent of stock counters. This is not sustainable for our clients.
“What will it take us to realise the vision? We need trillions of kwacha for Malawi to move from where we are to where it wants to be by 2030. This is why we created the alternative investments to match the needs of the economy.”
Mikwamba said the initiative has since created UIlimi Fund focusing on agriculture and has a commitment of $43 million (about K35.4 billion) with $26 million (about K21.4 billion) deployed.
The initiative also has an infrastructure fund which has already deployed $11 million (about K9.1 billion) in the infrastructure space while the private equity fund, to focus on financial inclusion, will be closing deals “very soon”, according to Mikwamba.
Despite launching the initiative on Thursday, Old Mutual Investment Group already has some investments, including Gala Estate, a macadamia farm in Namitete, in Lilongwe with approximately 6 000 hectares of land, providing 1 000 jobs in the 12 farming estates it operates.
The firm has also invested in the first fully irrigated macadamia farm in Malawi, Jacoma, which owns Tropha in the Northern Region and has over 1 000 hectares and about 900 workers.
Under the infrastructure banner, the firm has completed hostels for 154 students at Kamuzu University of Health Sciences, Lilongwe Campus. Students have occupied the hostels from February this year.
In his remarks, guest of honour at the event, Reserve Bank of Malawi Governor Wilson Banda observed that with the country facing an infrastructure funding gap of between $600 million to $800 million annualy, the initiative by Old Mutual is commendable.
He observed that with macademia nuts alone expected to equal 20 percent tobacco foreign exchange earnings, the initiative augurs well with monetary authoritys’ position to diversify sources of foreign exchange earnings means.
