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Resurfacing of Retention Funds |
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| By Staff Writer |
Q2 of 2024 | 2 months ago |
In the first quarter of this year we saw the resurgence of creation of special purpose retention unit trusts funds , which we last saw those days were the times the industry was in the crossfire of bad debts by African Bank.
The resurgence now seems also connected with bad debts , this time not African Bank but a financial services subsector that deals with financing the buying and leasing minibuses in the booming taxi industry. This subsector was a darling some few years back, I can remember a social post last year where it advice instead of owning and operating a taxi you can buy shares of JSE listed Transactional Capital (SA Taxi owner),thus enjoying ripping the good earnings without worring about the fuels , maintenance and other related daily activities of maintain a taxi.
Two media-mentioned finaciers that are being mentioned , namely: - SA Taxi
- Bridge Taxi Finance
As of early of 2nd quarter, there are 5 unit trusts that spin-off retention funds to house the bad loans books, namely:- Mi-Plan IP Enhanced Income Retention Fund
- Saffron BCI Active Bond Retention Fund
- Saffron BCI Opportunity Income Retention Fund
- Vunani BCI Bond Retention Fund
- Vunani BCI Short Term Fixed Interest Retention Fund
To give you the monetary extent of the situation , let s take for example the case of Mi-Plan BCI Enhanced Income . The fund disclosed that 8.71% of its total fund size ,which is around R600 million, is invested to two financial instruments (notes) issued by Bridge Taxi Finance . Total fund size of the fund is around R7 Billion.Only Vunani BCI Short Term Fixed Interest Fund that is not have yet reach a R1 Billion fund size value, this means its a lot of money being exposed to this meltdown.
| Did You Know ? |
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| In 2019, Stanlib spinned off index tracking funds to a boutique asset manager 1VEST. |
| Asset manager Mazi Capital was founded in 2006 by Malungelo Zilimbola. |
| Botique CI and Botique Investemnt Partners were acquired by Apex Group in year 2023. |
| Conglomate Old Mutual acquired asset manager Marriott in 2005. |
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