Ecobank’s asset management business, performed extremely well in 2017, with significant growth in assets under management (AUM).
EDC achieved this by leveraging the extensive branch network of our sister company Ecobank Ghana, which helped bring its asset management products to the doorstep of clients by taking advantage of the bank’s existing distribution network. In the last five years, the AUM has grown from C283m ($63m) in December 2013 to C1.6bn in December 2017, which represents a compound annual growth rate (CAGR) of 41%. The fixed income fund achieved strong growth, from C9m at the end of 2014 to C510m at the end of 2017.
EDC’s securities business has also consistently been ranked in the top three securities traded on the Ghana Stock Exchange (GSE). In the last year, the firm had an 8.15% market share of trades on the exchange.
One of the key attributes which separates EDC from the competition is the fact that Ecobank operates in 36 African countries, which gives the company extensive local knowledge in each market. As investors in Africa are becoming more sophisticated, they are looking beyond their local markets and going in search of favourable yield.
Ecobank’s pan-African presence allows its clients to seamlessly explore other markets in Africa, safe in the knowledge that the fund managers have an in-depth knowledge of the local market. In West Africa, for instance, Ecobank Development Corporation’s brokerage clients have the capacity to trade on three stock exchanges: Ghana Stock Exchange (GSE), Nigerian Stock Exchange (NSE) and Bourse Régionale des Valeurs Mobilières (BRVM) in Abidjan, Côte d’Ivoire.
Ecobank currently has country- and regional-specific funds in Ghana, Nigeria and the Union Economique et Monétaire Ouest Africaine (UEMOA) region covering various investment strategies and different asset classes. The bank’s pan-African products are a central part of its growth strategy, and the Middle Africa Bond Index (MABI) is a perfect illustration of this plan.
The index provides a unique investable benchmark that tracks the performance of local currency bond issuances in sub-Saharan Africa, excluding South Africa. The MABI can either index as a standard fund or as a segregated, separately managed account. The fund, which is currently domiciled in Mauritius, allows investors to have the choice of having a passive or an active share class or a combination of the two.
For the passive share class, the asset manager will actually be looking to replicate the performance of the Index, while with the active share class, the objective will be to outperform the index and generate alpha. Investors that have chosen to have a segregated account have the choice of both strategies as well. Additionally, in 2018 EDC will launch a pan-African Eurobond fund and equity funds.
The planned activity in this year follows a groundbreaking 2017 where EDC’s parent company Ecobank Transnational Incorporation (ETI) issued a $150m convertible bond on the London Stock Exchange’s new International Securities Market (ISM). This was the first ever convertible debt offering by an African issuer in London. The securities division also listed Ecobank Côte d’Ivoire on the BRVM. Further activity in the bond market is expected in 2018 for a significant bank in Ghana and a major non-bank financial institution.