Madison Asset Management Company streamlines

MADISON Asset Management Company Limited (MAMCo) has realigned its products to meet the current economic challenges.

MAMCo is a subsidiary of Madison Financial Services Plc.

Announcing the company’s new operational plan, corporate communications manager Patience Chisanga said the move was aimed at attending to
immediate challenges and focusing attention on re-aligning products and services.

“Towards the end of 2018, the regulator, Securities and Exchange Commission (SEC) issued a directive on the prohibition of investment activities which disallows guaranteed returns by Capital Market Operators such as MAMCo,” Chisanga explained in a statement yesterday. 

“Accordingly, MAMCo is in the process of winding down its Fixed Income Fund portfolio, a fund which guaranteed a return and had been available to its esteemed customers for the last ten years. This process of unwinding the Fixed Income Fund has brought about some challenges because a substantial portion of the Fund was invested in real estate whose values are subject to market perils and in the current economic environment cannot be realised in the short to medium term.”

She stated that the directive from the Securities and Exchange Commission had affected the company’s business lines.

Chisanga stated that it was, therefore, necessary for MAMCo to restructure its business according to the business environment.

“Therefore, the company’s business lines are being restructured and the Fixed Income Fund and attendant assets ring-fenced in order to comply with the SEC’s directive,” Chisanga stated. 

“MAMCo has embarked on liquidating the fixed assets underlying the Fixed Income Fund to address the obligations to the investors in the Fixed Income Fund. This exercise is being undertaken with a view to unlocking and maximising the cash value of these assets.” 

Chisanga, however, warned that the exercise might take a bit long to complete due to the depressed economic outlook.

She nevertheless assured that the streamlining would create a smaller organisation with great financial stability.

“Against a rather depressed and illiquid economic outlook, it is envisaged that the exercise may take a while to be accomplished. Efforts to expedite the process has however been initiated through the proposal of a Madison Asset Management Company Limited Scheme of Arrangement for the Fixed Income Fund investors,” stated Chisanga. “The streamlining of MAMCo’s operations will create a leaner organisation with greater financial flexibility that is highly focused on delivering a one-stop shop for investors through the following products and services: Unit Trusts, Portfolio Management, Stockbroking, Collective Investment Schemes, Gratuity and Pension Fund Management as well as broader asset management services.”

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