Azimut: Modifying Finance and Reinvigorating Investment Funds in Egypt
Updated 3/12/2024 8:00:00 AM
Arab Finance: Investment funds and asset management have faced some troubling conditions over the past few years, including inflation, currency devaluation, and the COVID-19 pandemic. However, the market is now experiencing a growth spurt, with firms like Azimut leading the charge.
Azimut and similar companies offer various investment funds, catering to diverse risk appetites and financial goals. This fosters financial inclusion and empowers Egyptians to navigate an evolving economic environment.
That is why Arab Finance sat down with Ahmed Abou El Saad, CEO of Azimut Egypt and Head of Regional Asset Management – MENA and Türkiye for an exclusive interview.
He shared key areas of Azimut’s focus, its unique approach to investment solutions, and its commitment to both financial growth and social impact.
1-What are the key areas of focus for Azimut in the current market landscape?
In the current market landscape, Azimut has strategically focused on diversifying investment solutions tailored to meet the varied objectives of the Egyptian population.
With a substantial demographic presence and a keen interest in essential needs such as food, healthcare, and education, the Egyptian populace seeks guidance on effective wealth management amidst inflationary pressures.
Transitioning from a traditional model catering solely to institutional investors, Azimut has embraced a more inclusive approach, democratizing access to financial services across all strata of society.
This marks the beginning of launching various investment funds, designed to cater to our diverse base of customers.
This paradigm shift was made possible through the innovative investment fund model, enabling scalability and broad outreach to a diverse client base.
Over the past four years, Azimut has spearheaded a transformative movement in asset management, particularly by reinvigorating the concept of investment funds within the Egyptian market.
Amidst a global shift away from traditional banking instruments due to waning confidence and inflationary concerns, there has been a notable surge towards capital products like mutual funds.
Collaborating extensively with industry stakeholders, Azimut actively contributes to nurturing and expanding Egypt's burgeoning investment landscape, poised for substantial growth in the upcoming few years.
2-How is Azimut differentiating itself from other investment firms in the region?
Azimut distinguishes itself from other investment firms in the region through a unique business model centered on creativity and innovation.
The company consistently leads the market by pioneering new products and services of unparalleled quality.
Notably, Azimut was the first to introduce an investment fund independent of banks, as well as the first to launch a charity mutual fund and a gold fund.
This innovative approach is underpinned by the extensive experience of the Azimut International Group, which operates in 18 countries globally with assets totaling $100 billion.
Drawing on successful models and services implemented worldwide, Azimut Egypt stands to leverage this rich expertise for its benefit.
3-Can you elaborate on the performance of "Ataa", the charity fund, and its impact on Egyptian communities?
Ataa, Egypt’s pioneering charity mutual fund, is based on the concept of a charitable endowment. This innovative approach aims to preserve the capital and ensure the continuity and sustainability of charitable efforts.
Instead of relying on one-time donations, Ataa operates on the principle of donating the profits generated by the fund's investments.
For instance, if the fund has a million pounds, the capital is not depleted, and the returns are what is donated, thereby maintaining the fund’s capital and providing a steady stream of donations.
In the first three years of its operation, Ataa Investment Fund did not experience any recoveries to avoid compromising the fund’s liabilities.
The fund’s structure has proven to be highly successful, and we have volunteered with high commitment to establish and manage this unique initiative without receiving any compensation. The fund is a continuation of Azimut’s dedication to the community.
4-With the launch of "az-Gold", how do you view the role of precious metals in diversifying investment portfolios?
The "AZ-Gold" Investment Fund, Egypt's first gold investment fund, offers investors a unique opportunity to invest in precious metals under the supervision of the Financial Regulatory Authority (FRA).
The launch of the AZ-Gold Investment Fund represents a significant effort by Azimut Investments to address the growing demand for diversification in investment portfolios.
Precious metals, such as gold, have traditionally been considered a safe haven for investors seeking to protect their assets from currency devaluation and high inflation.
However, investing in gold in Egypt presents challenges, including the storage of gold which poses security risks. The AZ-Gold Fund addresses these challenges by providing a convenient, accessible, secure, and Sharia-compliant investment process.
When the AZ Gold fund initiated subscriptions, it attracted 7,000 clients holding EGP 152 million.
Subsequently, the AZ Gold investment fund experienced substantial growth post-subscription closure, expanding its clientele to 90,000 individuals and nearing a fund size of approximately EGP 1 billion before encountering a recent decline due to market fluctuations in gold prices.
The success of the az-Gold Fund highlights its appeal and accessibility to a wide range of investors seeking exposure to precious metals in a secure and compliant manner.
6-Can you share any specific examples of how Azimut has helped clients achieve their financial goals?
In 2022 and 2023, the global economic landscape has been characterized by high inflation and currency devaluation, which have significantly impacted the purchasing power of savings.
However, Azimut has demonstrated its ability to help clients maintain the value of their savings through its investment products.
For instance, investors in Azimut's dollar investment fund have been able to preserve the purchasing power of their savings, even as the value of local currencies has decreased.
This is particularly significant for individuals who have seen their savings lose over 60% of their purchasing power due to inflation and currency devaluation. By investing in Azimut's products, clients have been able to protect their savings.
7-What are the key factors you consider when evaluating potential investment opportunities for the company?
When evaluating potential investment opportunities for the company, Azimut considers several key factors to ensure alignment with its core business and strategic objectives.
The company's renowned asset management capabilities, built over more than 30 years, play a crucial role in the evaluation process.
Furthermore, Azimut's commitment to effective asset management solutions based on specific skills ensures that client needs are met through tailored investment strategies.
By aligning its investments with client objectives and leveraging its expertise in asset management, Azimut strives to deliver value and drive growth for its clients.
However, the company's primary focus is asset management, and all other investments are complementary to this main investment.
This approach allows Azimut to invest heavily in its research and development (R&D) department and customers’ satisfaction and retention, ensuring that its products cater to various investment objectives.
By prioritizing investments that support its core business and enhance its ability to provide exceptional services, Azimut is able to make strategic decisions that contribute to its long-term success.
8-How do you see technology and digital transformation shaping the future of investment management, and how is Azimut adapting to these changes?
Digitalization has reshaped the monetary landscape. The company has proactively embraced digital transformation, particularly in response to the challenges posed by the COVID-19 pandemic, positioning itself at the forefront of the digital era.
This strategic readiness has made Azimut a preferred partner for fintech players seeking to enhance their product offerings.
The company stands out as a leading asset management firm with a unique ability to engage with various fintech entities.
From consumer finance firms like Valu and lending companies such as 7alan to digital payment providers like Mentum and online brokerage platforms like Thunder, Azimut has emerged as the partner of choice.
The company's strong technological orientation and seamless adaptability to digital operations have enabled successful collaborations with these entities, reflecting Azimut's commitment to leveraging technology for innovation and growth in the investment management landscape.
9-Can you shed light on Azimut’s financial performance last year?
While we are unable to provide detailed financial performance information as a non-listed company, I can offer some insights into Azimut's recent figures.
In 2023, the company experienced significant growth, with revenues increasing fivefold and bottom-line figures also multiplying by the same factor.
Moreover, assets under management saw a substantial rise of 70%, indicating notable progress in the financial strength and performance of the firm.
10-What are Azimut expectations, goals, and ambitions for 2024?
Azimut's expectations, goals, and ambitions for 2024 are centered on strategic growth and enhancing accessibility to its diverse range of investment products.
With assets under management reaching EGP 17 billion in 2022, the company is targeting to bring them to EGP 20 billion, aiming to leverage market opportunities to attract more investments and introduce new products from its pipeline to achieve this milestone.
Moving forward, Azimut will focus on making its array of products, including cash management, equities, dollar-based investments, and gold investments, more accessible to investors.
This will be facilitated through various business models, including partnerships with entities like Thunder and Arabia Online, as well as the launch of a digital mutual fund platform in Egypt.
This innovative platform, pending a fintech license, will offer customers seamless account opening through complete digital onboarding.
By prioritizing accessibility and the introduction of new investment solutions, Azimut is poised to drive growth and expand its product offerings in the upcoming period.
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