AÉKO ONGODIA, H’20
Helping Ugandans to invest today to create the tomorrow they want
Having spent more than 15 years in the investment industry, Aéko Ongodia H’20, a Masters graduate in Applied Mathematics and Statistics from Stony Brook University, New York, realized that professional fund management was a privilege accessible to only a select group of people. He was regularly approached by individuals who wanted similar services that were available to institutional investors through his first company, QuantEast. He realized he had a challenge – how could he deliver quality investment advice inexpensively to lots of clients who had different financial goals, some with only very modest savings? With his extensive industry experience, he set out to develop a relevant and accessible solution.
“Access to professional financial and investment guidance can help people to plan, save and invest for their future goals, such as their retirement, education, etc. in a culture that is traditionally poor at personal savings and investments.”
An investment philosophy anchored in goal-based investing
THE CHALLENGE: Most people in Uganda do not have access to investment guidance and products to help them save and invest their earnings and there is not a strong culture of saving and investing for future goals. As a result, many people do not save or invest enough to help them cope with unexpected events, such as loss of income due to a job loss. This problem is faced by people in both the formal and informal sectors who earn a monthly income and want to save and invest a portion of their earnings, but cannot access the financial vehicles to do so. For example, in Uganda only 10% of the labor force has a formal retirement account, and these figures do not vary much across Africa. Ongodia saw an opportunity to make it possible for millions of people who need financial and investment guidance to access these services via the web and USSD menu even on feature phones without connecting to the (sometimes very expensive) internet, adding the potential to scale the offering to have a bigger impact. He wanted to change lives by empowering people to achieve financial independence and freedom.
THE PROCESS: Ongodia harnessed the power of technology and his deep knowledge of the local markets to develop an automated, individual investment management platform that provides goal-based investing and custom investment solutions. In a few clicks, users can discover their risk profile, get a recommended asset allocation, create an investment account and monitor their account online. XENO has essentially automated the investment advisory process and made professional advice accessible to everyone, irrespective of the size of their account. When a client is ready to invest, he/she can transfer funds to their newly-established investment account using various payment methods, including mobile money. The XENO team of investment managers then invests on the client’s behalf, according to the investment strategy recommended when setting up the account. The company has a local custodian bank that holds contributions and a record of all the client’s investments. XENO does not have access to these funds; only the client does. All the company does is direct the investments. The client is able to monitor the contributions and investment performance in real time through an intuitively-designed dashboard. XENO operates under the core value of “empowering people in Africa to invest today and take firm control of their future”.
Ongodia and his team of investment and technology professionals kick started the process in 2016 by building a prototype robo-advisor, which they sent to 600 people together with a survey. Of the 240 who responded, 94% said that if XENO was available, they would use it. In October 2017, they launched a business-to-consumer offering in Uganda and a white label business-to-business offering for Kenya in October 2019. XENO has automated the provision of investment guidance and made it available for free. A user visits www.myXENO.com, selects a financial goal and then answers questions about investment period, financial situation, investment knowledge and attitudes to taking risk. The XENO algorithm then automatically processes the information provided and recommends an optimal investment portfolio based on their circumstances. The user funds their investment account using mobile money or bank transfer. XENO is vertically integrated. In addition to building their own robo-advisor, Ongodia and his team also structured the unit trust (mutual) funds offered and built the back-office technology used to manage and administer them. XENO charges its users a management fee of 2% of assets under management per annum.
XENO’s investment philosophy is anchored in goal-based investing, an approach that aims to help clients come up with a plan to save and invest current earnings smartly in order to accomplish a specific financial goal in the future. This approach evaluates every investment, asset and/or strategy based on its ability to help clients to reach their financial goals. Ongodia believes that a well-articulated goal gives people purpose and focuses their attention on the steps required to attain it. Users follow a four-step investment process – plan, save, invest and monitor.
THE RESULTS: After signing distribution partnerships with MTN and Airtel Mobile Money, XENO launched on the XENO-MTN USSD Menu and XENO-Airtel USSD Menu in December 2019 and January 2020 respectively. This was followed by the XENO Mobile App release in March 2020. The goal was to have 10,000 users by December 2020. XENO currently has USD150m in assets under management from their B2B customer base, 6,300 accounts on the XENO platform who have invested over USD5m in assets under management. They have achieved a 93% retention rate in the three years since they launched. XENO is licensed and regulated by the Capital Markets Authority.
LEARN MORE ABOUT XENO
XENO is a goal-based investment service that helps people in Africa to plan, save and invest for their financial goals.
Making saving and investing accessible to everyone
ABOUT AÉKO ONGODIA
Aéko Ongodia hails from Kampala in Uganda. He has an MSc in Mathematical Trading & Finance from the CASS Business School in London and a Masters in Applied Mathematics and Statistics from Stony Brook University, New York. His experience is vast, having spent time with Stanbic Bank Uganda followed by about five years with the Bank of Uganda as a research analyst and then head of stress testing and risk modeling. Thereafter, he joined the National Social Security Fund as a Fixed Income Analyst and then Fixed Income Portfolio Manager. Today he is the Principal member of QuantEast Advisory in Kampala, providing overall asset management advice to institutional investors (boards of trustees of pension funds, endowments and foundations), a Board Member of Vision Group, a leading multimedia company in Uganda, and the Founder and CEO of XENO Technologies Inc. and CEO of XENO Investment Management.
His deep experience in investments and portfolio management and awareness of the lack of a savings culture and access to investment guidance and savings vehicles led him to establish XENO. Through the XENO platform, he can help the masses to plan, save and invest for their future financial goals and as a consequence, help them approach the future more confidently with a robust savings plan. He hopes to stop people from retiring into old-age poverty or going into debt to finance things they could have gradually saved and invested for.
Ongodia was selected as one of five Pritzker Fellows in 2020.
I AM A HARAMBEAN
Aéko Ongodia views Harambe as the perfect partner.
“Being a Harambean allows me to draw on shared experiences of building a start up in one of the most challenging, but dynamic places on earth – Africa. The Alliance has sponsored and enabled discussions with fellow entrepreneurs with unmatched grit and inventiveness to tackle some of the continent’s greatest challenges such as education, trade and wealth creation. It is an invaluable community.”