Asset Management

Overview

EFG Hermes Asset Management offerings encompass mutual funds and discretionary portfolios with both country-specific and regional mandates. These include equity, money market, fixed income, indexed, Sharia-, and UCTIS-compliant mandates individually tailored to suit a variety of needs, targeted objectives, and risk appetites. The division serves a diverse and well-established client base, with a special focus on long-term and institutional clients.

At year-end 2018, the division had total assets under management (AUMs) of USD 2.1 billion regionally, and EGP 13 billion in the Egyptian market.

For the full year 2018, Egypt AUMs managed to grow 4.3%, supported by injections and positive performance of the Fixed Income portfolios and MMFs, which added 14.7% to the total AUMs and overshadowed the lackluster equity markets’ performance and redemptions.

EFG Hermes Asset Management continues to be the only asset manager in the region with a significant track record as an investment manager. Our funds continue to consistently outperform regional benchmarks and the division continues to work on capturing a wider network of clients as it expands along with the firm in terms of product offering and geographical reach.

Operational Highlights of 2018

It was a challenging year in the asset management space due to an investment climate in constant flux and general uncertainty surrounding emerging markets. The regions in which we operate were rife with volatility, but despite the challenges, we managed to maintain our standing as an asset management house of choice and have positioned ourselves to take advantage of improving capital market climates in the coming year.

In 2018, EFG Hermes Asset Management partnered with Emirates NBD Egypt to launch the Bank’s first money market investment fund, Mazid. The Fund, which is managed by EFG Hermes Asset Management, is the first new money market in the Egyptian market since 2015. The addition of the fund the asset management portfolio showcases the division’s strength and ability to provide the market with a wide variety of investment products. The timing of the launch in late 2018 also sends a signal that the Egyptian economy is showing strong signs of stability. The new mandate brings the total number of local funds managed by EFG Hermes Asset Management in Egypt up to 19.

2018 saw the first full year of post-investment operations at Frontier Investment Management (FIM), a part of the buy-side platform’s efforts to transform EFG Hermes Asset Management into a product-driven platform that centralizes distribution and client relationships. FIM now functions as EFG Hermes’ regional asset management arm. As of 2018, the division also launched a fixed-income strategy under FIM to continue to expand its product offerings. Despite difficulties engendered by a volatile market climate, the division’s regional business at FIM continued to grow throughout 2018, and the year saw the company launch a new real estate investment strategy that promises to yield significant returns for investors.

[subhed] Awards and Accolades
EFG Hermes Asset Management continued to garner prestigious awards in 2018, gaining major recognition for its innovative approach to the industry and maintaining its longstanding position as a market leader. The Division was recognized as Best Asset Manager in Egypt at EMEA Finance’s African Banking Awards. EFG Hermes Asset Management also received the Outstanding Performance in Asset Management Award at Business Today’s Top 100 Awards, further recognition of its consistent ability to secure superior outcomes for investors. The division’s ability to tailor its offerings to fit clients’ varying objectives and risk appetites saw it honored with the Best Asset Management Solutions Award by The European. At the MENA Fund Manager Awards, EFG Hermes’ Bank of Alexandria III Fund was recognized as Fixed Income Fund of the Year, with its Al Baraka Islamic Equity Fund securing the Sharia Compliant Fund of the Year prize.

Key Financial Highlights of 2018

Asset Management revenue soared 26% y-o-y to EGP 409 million in FY2018 on the back of stronger revenues generated by FIM.

2019 Outlook

We expect to see volatility settle throughout the region in the coming year, with Egypt and Saudi Arabia having potential to deliver returns due to the resilient nature of these markets. We will continue to deliver consistent, long-haul performance across fund types, from money market funds to fixed income and equities.

With Egypt continuing to be a beacon of stability in the region, we plan to continue to expand our offering in the country and increase our standing in the market by capitalizing on the relationships we have built across our footprint.

As EFG Hermes continues to build on its buy-side platform, launch targeted funds, and implement segregated portfolio management, it is also continuing to move ahead with its carefully calculated regional expansion plans.