What Is The OAK Special Fund? | Rina Hicks |

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OAK Special Fund is a Leveraged Asset Allocation Fund domiciled in Kenya. It offers investors a unique opportunity to access both local and global markets. The fund is managed by Faida Investment Bank and is licensed by the Capital Markets Authority as a Special Collective Investment Scheme (CIS).

Key Information

Inception Date: February 2024
Base Currency: Kenya Shilling (KES)
Minimum Investment: KES 1,000,000
Minimum Top-up: KES 100,000
Lock-in Period: 6 months
Fund Manager: Faida Investment Bank

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What is the Oak Special Fund?

The Oak Special Fund is a type of Collective Investment Scheme (CIS), regulated by the Capital Markets Authority (CMA). It allows fund managers to have more creative and flexible strategies in managing investments, provided they clearly disclose the fund’s objectives, strategy, and risk management approaches. The key differentiator of a special fund, like Oak, is that it’s not bound by the rigid guidelines that limit asset classes or percentages in more traditional funds (like money market or fixed income funds).

Instead, special funds allow for broader diversification across different asset classes—such as equities, bonds, commodities, real estate, and even private equity or global assets—enabling fund managers to tailor the investment strategy to meet specific goals and opportunities.

The Evolution of the Oak Special Fund

The journey to creating the Oak Special Fund stemmed from the changing dynamics in Kenya’s financial markets. Rina highlights several significant events, such as the collapse of banks and companies, the rise of government borrowing, and a decrease in corporate bonds and Initial Public Offerings (IPOs), which have led to reduced opportunities in Kenya's capital markets. Moreover, global shifts, including the rise of real estate investments and cryptocurrencies like Bitcoin and Ethereum, have diverted investor attention from local capital markets.

In response to these market shifts, Faida Investment Bank recognized the need to offer more diversified opportunities. The Oak Special Fund was designed to cater to clients seeking not only safety and inflation-beating returns but also wealth creation opportunities that go beyond traditional investments. This fund taps into global markets and a variety of asset classes, ensuring that investors can benefit from a more comprehensive approach to wealth management.

Why the Oak Special Fund?

The creation of the Oak Special Fund (formerly Kua) was driven by the need for flexibility, risk management, and diversification. As Rina explains, markets are volatile, and relying on a single market—whether local or international—can expose investors to significant risks. For instance, geopolitical events like the war in Russia or a crash in the Chinese real estate market can severely impact local investors who are not diversified.

The Oak Special Fund aims to provide access to global opportunities and manage risks through diversification across different asset classes and markets. It seeks to deliver higher returns than traditional investments, while also managing volatility through tactical investment strategies. The fund’s design ensures that investors can gain exposure to growth opportunities, hedge against inflation, and create wealth over the long term.

Returns and Risk Management

While Rina did not disclose specific target returns for the Oak Special Fund, she emphasizes that the fund is designed to generate returns higher than inflation, making it an attractive option for investors seeking both growth and stability. The fund’s diversified portfolio includes a range of asset classes, from global equities to fixed income and commodities, enabling it to capitalize on opportunities in different markets.

Risk management is a core part of the fund’s strategy. The Oak Special Fund employs various tactics, such as hedging and strategic asset allocation, to mitigate risk in volatile markets. By having a broad exposure across different sectors and geographies, the fund ensures that its risk is spread out, thus reducing the chances of significant losses from any single market or asset class.

Transition from KUA to OAK

The Oak Special Fund was initially launched as Kua Special Fund. However, the name change to Oak reflects the growth and strength the fund aims to offer its investors. While the name may be changing, everything else about the fund—its structure, strategy, and regulations—remains the same. The fund is licensed by the CMA, and its performance and assets are closely monitored by custodians and trustees to ensure transparency and compliance with regulations.