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Nelson Gahadza
Senior Business Reporter
Imara Asset Management Zimbabwe, says it has over the years reduced money market investments and leaned on assets for businesses listed on the Zimbabwe Stock Exchange (ZSE), which saw substantial growth of its portfolio in 2021.

The asset management firm’s primary focus is the management and administration of the investment portfolios of Zimbabwean institutional pension funds, corporates and high net worth individuals.

Chairman, Peter Bailey, in a statement of financials for the year ended March 31, 2022, said, funds under management (FUM) ended the year at $48 billion or US$335 million using the auction exchange rate of $142 to the US dollar, which compares well with the US$152 million for the year to March 2021.

“Whichever rate used FUM in US dollar terms has again risen strongly despite the pandemic that started back in March 2020,” he said.

He noted that Imara’s revenues, which grew to $302 million from $126 million in prior year, were driven by the funds under management, which are heavily influenced by the ZSE performance.

“Our investment policy over the past few years has been to minimise money market assets, which have provided very poor yields and whose capital values have been severely depleted in real terms due to rapidly rising inflation.

“We have therefore invested the bulk of our clients’ assets into businesses listed on the Zimbabwe Stock Exchange (ZSE),” Mr Bailey said.

During the period under review, management fee-income from pension funds grew to $240 million up from $108 million in prior year while non-pension funds fee-income grew to $61 million from $21 million in 2021.

Other operating income grew to $59 million from $22 million in the prior year comparable.

Mr Bailey said Imara earned net profit of $116 million during the year under review, up from $22 million the year before.

He noted that official inflation ended March 2022 at 73 percent although this had since risen to 192 percent in June.

He noted that this compared favourably with Treasury Bill rates and bank deposit rates of below 25 percent.

“As reported in last year’s chairman’s statement, the ZSE rose substantially in 2020/21 from a very low base and with the gains achieved in this financial year, US dollar valuations were no longer cheap in US dollar terms by the end March 2022.

“However, so long as inflation remains high and money market returns stay substantially negative in real terms, the Zimbabwe dollar values will continue to rise in Imara’s opinion,” said Mr Bailey.

He noted that Imara’s balance sheet and capital base remained robust and ended the year well above the Securities and Exchange Commission of Zimbabwe’s minimum capital requirements.

Mr Bailey said as was the case in the previous financial year and in order to preserve this capital base, management chose to invest a significant proportion of its capital into listed equities rather than money market assets.

He said having declared a dividend in February 2021, the first in a long while, the board has continued to declare dividends since that time.

“For the financial year 2021/22, the board declared dividends of $60 million. The bulk of Imara’s cash flow has continued to be channelled as much as possible to the staff whose total remuneration improved further in real terms from the lows of 2019,” he revealed.