Management
This paper is devoted to the company CI Capital Holding. It is located in Cairo, Egypt. This company is the premier investment bank that has four lines of its business: investment banking, securities brokerage, research services and asset management. The last one is the subject of this investigation.
Description of Organization
Value Proposition
The company CI Capital Holding offers its clients a range of fixed income, equity products and money market within the business line of Asset Management. Assets under management amount the sum of EGP 9 billion (Official Site of CI Capital.). The company offers clients eight investment funds and discretionary portfolios. The main goal of Asset Management department is to achieve high long-term returns through three sophisticated investment approaches: top-down, bottom-up, structured products.
The universal advantage of CI Capital is that it is a part of wholly-owned subsidiary of CIB. The last one is the leading universal bank in Egypt. Its relationship with CIB gives CI Capital strong opportunities: access to more than six hundred corporations in Egypt, multi-year track record relationship with originators and dealmakers from different sectors.
It should be noted, that the parent company of CI Capital has offices in Cairo as well as in New York. In this case, it serves clients in both Egypt and North America.
Thus, one can say that the value proposition of Asset Management department of CI Capital is quite effective and can be explained by strong organizational structure, management style and other features.
According to the Global investor awards, the company of CI Capital Holding takes award “Best Asset Manager in Egypt” for the second year in a row (Official Site of CI Capital.). Thus, it can confirm an excellence that the company delivers to the clients. Crucial advantages and features of the organization are analyzed in more detail in the next paragraph.
Features of the Organization
Asset management department of CI Capital Holding can be considered as the largest bank-backed asset manager in Egypt (Egypt. The Future.). It operates huge sum of assets that makes CI Capital Asset Management the largest bank-owned asset manager in Egypt and number three overall. Asset Management department can be considered as a manager of top-performing money market fund in Egypt in 2011, 2012 and 2013 (Official Site of CI Capital.). At the same time, Asset Management department is a noted pioneer in a product innovation, including first shari’ah – compliant fund and one-year open-ended capital protected fund.
In general, the most important advantages of Asset Management of CI Capital are the following:
strong organizational structure;
high performance and a lot of instruments to measure and stimulate it;
appropriate management style.
Let’s analyze each advantage in more detail and identify how it can impact on the value proposition of the department.
Asset Management department of the company differs by a strong organizational structure. As a rule, the organizational structure of the enterprise unites the composition, subordination, collaboration and distribution of work on the units and controls, between which certain relations are established for the implementation of the powers, command and information flows. There are several types of organizational structure and analyzed one can be considered as linear-functional.
There are twenty four specialists in the Asset Management department of CI Capital Holding (Official Site of CI Capital.). The management of the department is the responsibility of the head. In order to receive more useful information about the structure of Asset Management department, I have interviewed Ahmed El Saharty. We worked together at this company in 2014. Now he takes the position of the Senior Equity analyst. Ahmed El Saharty is a representative of an Egyptian nation. He graduated from the University of Toronto. His specialty was both Finance and Economics. Ahmed El Saharty worked in the US and then moved to Egypt. He started from the position Junior Equity Analyst in CI Capital Holding. Thus, one can say that the company is interested in career growth of its employees. This method is a common for the majority of international companies.
In general, the organizational structure of Asset Management department is characterized by features of linear-functional type. Such structure type is based on the line powers on the one hand and functional division on the other hand.
The scheme of the department organizational structure is presented in the appendix A. It is possible to identify management style and instruments for measuring performance in the department through its organizational structure. It should be noted, that all important decisions are taken forward to the Managing Director and Head of Asset Management. The current managing director and head of Asset Management is Amr Abol-Enein. He has more than twenty years of experience in the field of equities, debt and alternative investments. His previous position was General Manager and Head of Investment at Banque du Cairo. He was also a member of the ALCO Investment Executive Committees. Amr has a great experience as an Executive Director of different local and international investment banks. At the same time, Amr co-managed USD 2 billion equity fund in the Middle East, North Africa and Turkey. Amr takes active part in the activity of the Central Bank of Egypt and Egyptian State Privatization Committees. Amr has finished the MBA program at Birmingham Business School in UK. Thus, one can say that management of CI Capital uses the rigorous approach to recruitment, especially, managers and candidates for managerial work.
The department has two divisions: the Equity and Money Market departments. Let’s analyze first of them in more detail. The equity department has the head, who controls the activity of almost all employees. The huge part of employees include the capital market managers, analytics and risk managers. First of them are in charge of revising over all the orders and performance of both funds and portfolios. Thus, they are responsible for measuring performance. There are several types of funds, which are under management in the department. They are: fixed income, capital protected, money market and Islamic equity.
Analysts analyze markets and keep track of the main indicators of the department and company. There are several levels of analysts: Senior Equity Analyst (for example, Ahmed el Saharty), ordinal analysts and Junior Equity Analysts. The last ones report to the head of the department and specific managers. They are portfolio manager and fund manager. These positions are not doubled in the department. The portfolio manager can be considered as a very important employee in the department. He is in a change of the portfolios only. The next position is a fund manager. He is in charge of all the funds that only consist of equities. Analysts report to these two managers within two directions: research on the companies and stock picking. One more specific position is department trader. He monitors the volumes in the market and keeps an eye on the daily trading quotes.
Risk managers estimate risk and compliance of authorities by officers in order to check trades, which must be executed within the rules of the Egyptian Stock Exchange. As we can see, employees are organized so their structure provides the quite effective measuring of performance. There are a lot of relationships between portfolio and fund managers and other employees. The continuous communication between colleagues can help to control each part of business processes.
The Money Market Asset management department has the same structure and employees as at the Equity Department. At the same time, the employees of the second department are mainly responsible for buying and selling bonds.
The majority of people are Egyptians in the Asset Management department. It helps to avoid any cultural and ethnic conflicts among staff. At the same time, the department serves clients from Egypt as well as from other countries. For example, one of the portfolios is called “El Amir”. It is owned by the Saudi Arabian prince. This portfolio is considered as one of the most important for the company. At the same time, this client is extremely cautious with the exposure of his portfolio. He gives a lot of instructions about what he wants. In this case, managers are in contact with such foreign investors all times and even can travel to them in order to better attend their needs. Thus, all managers of the department must be tolerant of all cultures and nations, know the special features of one or other foreign investors in order to better understand them. It can be quite difficult, that’s why the company pays a great attention to the recruitment process and facilitates the education process of the staff within the company.
The key managerial commitments that have shaped the organization both internally and externally include the regular control of all business processes, continuous communications between employees and opportunities to career growth within the company (Ahmed El Saharty can be a great example of that).
Recommendations
After analyzing the value proposition of Asset Department one can propose some recommendations for achievement better performance and satisfy all client needs. First of all, it needs to intensify the activities of the department in the global market. In this case, the emerging markets can be considered as the most perspective. At the same time, such markets are more risky. That’s why, the department should pay more attention to the research that is conducted by risk managers and analysts.
As it has been mentioned before, portfolio manager, fund manager and department trader are the most important positions in the department. It should be noted, that the absence of such managers during the holidays, sick can be a real problem for a whole department. At the same time, the concentration of a certain work and decision-making by one person rather than collegially may adversely affect the work of the department. Each wrong decision can impact on subsequent issues. Thus, these positions can be doubled in the department or be arranged in another way.
Another issue is connected with that the company is not interested in rotation of employees. The majority of staff is Egyptians. Sometimes, it can negatively impact on the right understanding of client needs. It can be a great initiative, if the company starts to rotate between Cairo and New York offices. New communications and new experience can increase employees’ motivation and attractiveness of the company for them.
It should be noted that CI Capital was awarded the Best Investment Bank in Egypt in 2014 by EMEA Finance and the Best Investment Bank in Egypt in 2013-2014 by Global Finance (Egypt. The Future.). Outstanding performance was the main reason for receiving awards. Thus, one can say that CI Capital is the number one in the local market. In this case, it needs to enter the global market, because the numbers of foreign investors will increase from year to year. At the same time, economic growth slows down significantly in many major countries, middle-income and asset prices falling sharply across the board. Such countries as China, India and BRICs countries can be the most perspective in the next ten-twenty years. Evaluation of the emerging markets needs more attention: emerging countries differ by huge market potential as well as country risk. Social and political systems have a lot of differences in comparison with developed countries. Activity in emerging markets needs international specialists, who have similar experience in such countries.
After analyzing possible recommendations, one can say that method of staff rotation can be the most effective within the company. It can be implemented easily enough. It can help to increase staff motivation and grow more qualified specialists with minimal efforts. Another effective change, which can be implemented, is opening new offices in emerging countries or where CIB has quite big divisions except Egypt.
In conclusion one can say that Asset Management department of CI Capital is characterized by comprehensive organizational structure. Its management style is based on strong leader and effective communications between employees. The last ones provide regular evaluation of performance and controlling of all operations. At the same time, there are some problems, which must be resolved for better company’s performance.
Works Cited
Egypt. The Future.,. “CI Capital. Egypt. The Future.”. Egypt The Future. N.p., 2016. Web. 17 Mar. 2016.
Official Site of CI Capital, “CI Capital Holding. Asset Management.”. Cicapital.com.eg. N.p., 2016. Web. 17 Mar. 2016.
Appendix A. Organizational Structure of Asset Management Department of CI Capital Holding
