Interview with Beltone Asset Management’s Khaled Darwish

On the sidelines of the EnterpriseAM AI Forum, we spoke with Khaled Darwish, CEO and Managing Director of Beltone Asset Management about Egypt’s evolving fund landscape. As currency devaluations reshape financial habits, younger retail investors are moving beyond traditional cash holdings to higher-yielding alternatives. Darwish discusses why new types of alternative investments like fractional real estate are gaining traction and what he sees as huge growth potential for the asset management sector in Egypt.

EnterpriseAM: Most fund money in Egypt sits in money market funds rather than equity funds. Why has the industry developed in this way?

KD: I think this is changing now. People have started to realize that there are other investments available. At Beltone, we are more heavily weighted toward equities—we're talking 35% to 40%—whereas most other companies [asset managers] are at around 10% to 15% equities with the rest in money markets. Equity funds have started gaining significant attention, and people have begun learning what alternative investments mean. Gen Z and Gen Alpha are especially interested in these investment tools.

KD: The devaluations in the last three or four years were a lesson in what hedging means. As the saying goes, "a blessing in disguise"—people realized what investing actually is. They shifted away from the mindset of just putting money in the bank while inflation eats it away, [and moved] toward putting it into something that acts as a hedge.

EnterpriseAM: You’re seeing this shift into equities mostly from the younger generations and retail investors, not institutional?

KD: Retail makes up around 85% to 90% of the market; institutions have started to decline. That’s because retail coding [investor registration] is everywhere—so many people across the country are registering themselves. People are investing heavily on a daily basis; new people are entering the market every day. The new generations fully understand what investing is, how to get in, and how to buy. Nobody goes to banks anymore. Trying to get a young person to open a bank account today is difficult—they don't want to go to a branch. Everything is on mobile; everything is instantly accessible, and this is just the start.

KD: To give you a statistical perspective: mutual funds in Egypt relative to GDP sit at around 1.5%. That is compared to other emerging markets where it's in the mid-20s, the US is at over 100%, Europe at over 85%, and East Asia at 50% to 60%. So we have exponential room for growth.

EnterpriseAM: You said that Beltone has a higher percentage of equity funds compared to other peers in the market. What stops an asset manager from launching an equity fund?

KD: We don't need to reinvent the wheel. Look at what happened in the US 35 years ago—institutions like Blackstone began creating trackers, and these index trackers took off globally, like the S&P, the Dow Jones, and so on. We created trackers just like those; we even called ourselves "The House of Trackers." As a result, we started attracting a massive audience looking for index trackers. A tracker requires specific systems and infrastructure. Take our "100-100" fund, for example—it's exclusive to Beltone. It holds 100 stocks that mimic the EGX100. It’s a very successful fund, delivering roughly five to six times the performance of the EGX30 over the last five years.

KD: Trackers started drawing people in. Beyond that, the game today is no longer just about issuing a fund—funds exist everywhere. The game is how to market and sell the fund. The business has shifted away from pure technicalities to marketing and distribution.

EnterpriseAM: When money leaves a money market fund, where does it go? Are you seeing money leaving money market funds and going into equities, or is all the money in equities from new retail investors?

KD: I always say that a money market fund is just a parking tool. If you have an upcoming real estate installment, you park your cash in a money market. But investing long-term in a money market is not really an investment. Ultimately, you're earning 18% to 19%, while the market average over the past 3-10 years has generated around 50% to 60%. So it doesn't make sense to keep money in an asset that gets eroded when inflation is very high. But for the short term, it's fine.

EnterpriseAM: You said that it's becoming more of a marketing and selling game because we have enough funds. Are there any fund products that the market needs that don't currently exist?

KD: Globally, Shariah-compliant funds are flying. Anything tied to Shariah principles is seeing huge demand across all demographics, often because culturally people view it as more ethical. Our "Wafra" fund is the largest Shariah fund [in the market]. It’s one of our flagship products.

KD: Additionally, we are launching fractional real estate ownership funds. Today, you can buy real estate starting at just EGP 1 k. Our model is different because it's not based on monthly installments. Once the deal is sealed, you pay once and that's it—no further obligations. You receive your ownership certificate proving you own a fraction of that property. Fractional ownership is taking off worldwide, it represents the future rescue mechanism for a real estate [sector] that demands liquidity, and it’s coming to Egypt in a big way. Our first issuance will likely launch before the end of the year in partnership with Amtar, which I believe is the top fractional ownership platform in Egypt.

EnterpriseAM: Where do you see the fund industry in Egypt headed?

KD: Going forward, what we need most is strong public awareness. We need to show [the market] that there are legitimate, regulated options that yield solid returns. We haven't fully reached certain demographics yet, but we are actively working on it. We recently partnered with Telda to attract Gen Z and Gen Alpha. In five years, Gen Alpha will be entering the workforce and Gen Z will be prime decision-makers with disposable income. By bringing them on board now, we are positioning ourselves alongside the next generation.

KD: The market opportunity remains massive. We have a population approaching 130 mn. With mutual fund penetration at just 1.5% of GDP, the upside isn't just double—it has the potential to grow thirty-fold from here. The government is supporting this through financial inclusion initiatives, and everything is now accessible via mobile apps. Going forward, things are set to head in the right direction.