Xeno seeks new markets to boost investor returns

Mr Aéko Ongodia. Photo / File 

What you need to know:

  • Xeno will merge Xeno Uganda domestic equity fund and Xeno Uganda regional equity fund to form Xeno East Africa equity fund

Xeno investors have approved a plan in which management of investment assets will extend into other regional markets.  

In a decision reached during the company’s annual general meeting in Kampala at the weekend, investors agreed that investable opportunities in the domestic market were relatively limited, thus warranting an expansion into markets within East Africa. 

The move will see Xeno Uganda domestic equity fund and Xeno Uganda regional equity fund merged and reconstructed as a single unit - Xeno East Africa equity fund - which will open up investment opportunities in equity securities listed across the East African markets. 

Xeno assets under management have grown from Shs21b to Shs31b for the period ended December 2021, driven by a surge in deposits from an investor base that has grown from 6,462 to 20,144.  

Mr Aéko Ongodia, the Xeno founder and chief executive officer, said on the sidelines of the annual general meeting that the merger of the two units was a legal requirement that must be approved by shareholders.  

“Where the domestic equity fund was struggling to get assets, with this amalgamation it won’t because the universe of those assets has been widened to include all of East African markets,” he said during the hybrid annual general meeting. 

Returns on investable assets, among which include bond funds, domestic equity funds and regional equity funds, currently average at 15.5 percent, 0.4 percent and 1.6 percent, respectively.

“We are combining them [units] because there are no opportunities in the domestic equity fund,” Mr Ongodia said, noting that going forward, Xeno will also seek investment opportunities in slightly lower companies such as the ones at Innovation Village seeking capital for investment.

“So instead of chasing mature companies that have been around for 20 years or more are not listing, I think the focus should go slightly lower because these companies could use that capital, and a good place to organise that capital is the Uganda Securities Exchange,” he said. 

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