If you were to sift through the wealth management and investment advisory space in the last two decades, it is easy to see how it has changed considerably. It continues to be one of the most dynamic and growing fields in finance.
Many people are now yearning to achieve financial independence and create wealth for themselves and their family. While most people perceive wealth management process to be a smooth ride, it is very different in reality. Because markets do not move in a straight direction and unexpected factors usually get in the way of savings.
In a bid to demystify wealth management and understand why investors need to determine their monetary goals and develop actionable plans that could help them achieve financial success, StartUp Magazine sat down with Edward Wachira, Chief Commercial Officer at Genghis Capital and a founding managing partner at Pamoja Capital.
He mused on the journey so far, the importance of wealth management and Genghis Capital’s plans for the future
What’s your background and how did you get where you are now?
I am a certified public accountant, financial analyst and investment banker. I had the good fortune of working for Kenya Airways both in Kenya and abroad, engaging partners and building networks in more than 20 African countries.
I also worked in Netherlands between 2002 and 2003, managing strategic partnerships between Kenya Airways and KLM. In the strategic corporate planning assignments across Africa, I led negotiations and structured commercial agreements with partners resulting in the expansion of the airline into Angola, Mozambique, DRC in Africa, and Saudi Arabia in the Middle East and Australia in the Far East.
I was still in aviation when I foresaw emerging opportunities in investment banking in the region.
There was need to move away from traditional classes of investment and wealth management to alternative kind of investments that are more productive. At this point, I was doing financial advisory on the side together with a group of partners. Foreign investors were also flocking to Africa looking for viable investment opportunities. There was need for a disruptive investment manager that would make use of technological innovations to help investors determine their monetary goals and develop actionable plans that could help them realize their financial objectives.
Against this background, together with a group of partners we started Pamoja Capital, first in Johannesburg, South Africa and later in Nairobi, Kenya.
I quit my aviation job and joined the business as the Managing Director in 2011.
Give us an insight into Genghis Capital and its mandates?
Genghis Capital is a Capital Markets Authority (CMA)-licensed investment bank that started off as a brokerage firm at the Nairobi Securities Exchange (NSE) in 2008. Over time, we have grown tremendously expanding our services beyond stock brokerage to include provision of Unit Trust Funds, Fund Management, Institutional Trading, as well as Corporate Finance Services.
In 2016, Pamoja Capital was in the process of making an application to the CMA to set up an investment bank to help investors navigate the sophisticated business arena in the region when an opportunity popped up. Genghis Capital had faced liquidity challenges when its principal banker, Chase Bank was placed under receivership.
We acquired Genghis in August 2016 under a special purpose vehicle called Overtime Capital Limited that we had established at Pamoja Capital.
What is your competitive edge?
When we acquired Genghis, we resolved to be different and unique. We identified mechanisms on which we would upset the market while meeting investors’ expectations.
At the time, technological innovation changing demographics, convergences of industries among other factors were starting to reshape the financial advisory and asset management industry.
We invested on innovative technology and AI, which has fundamentally changed how we do business, relate with customers and stakeholders.
The vast proliferation of data is changing the way that institutions ultimately make business decisions. It has helped us secure a niche market and do things differently, by being able to aggregate value in the society and redefine how people see money and investments.
If you have great products in a niche, great people with a high performing culture and great processes, you can grow very fast and create an exceptional brand. That is what we have done.
Tell us about your relationship with customers and how you guide them in achieving financial success?
Many people want to or are doing investments hands on. They depend on their own knowledge and understanding not knowing that they are susceptible to their own biases and misconceptions. Markets are complex, they do not move in a straight direction and unexpected factors usually get in the way of savings.
You need a professional fund manager or investment advisor to navigate the investment landscape. Professionals have more insights on the market, more experience and have the right networks to do the job right. They would definitely give you a peace of mind because your portfolios are in the right hands.
This will also protect you from fads investments that are characterized by a temporary excessive enthusiasm for a certain investing style, which is usually unsustainable in the long term. The quail bubble is a great example of an investing fad, which eventually burst here in Kenya.
In terms of delivering what your customers want, is there anything specific that you like to focus on?
In many respects, employing technology has helped us identify a market niche, understand it better, channel the right products and drive investment returns. With the help of AI and data analytics, we are able to understand the behaviors of customers, their lifestyles and what they want and give them high quality advice.
Simply put, we manage funds for retail customers, high net-worth individuals and institutions or corporations. We make well-timed investment decisions decision for these clients to grow their finances and portfolio.
We are able to diversify our clients portfolio based on their varied financial objectives. Based on our experience in the industry, we are able to give them access to higher value options with better capital appreciation prospects, as well as mitigating the associated risk.
On a practical level, why is wealth management important?
A client will benefit from a holistic approach that brings together several services to meet their specific financial goals and objectives.
Wealth managers enable one to participate in the economy from whichever point they. With our revolutionary G-Kuze App, you can invest from as low as Kshs 500. It’s all-inclusive and allows any kind of investor to participate in building the economy.
Many investors would wish to invest into various markets but they lack the knowledge, information, time and skills to do so. As experienced managers and advisors, we help individuals and organizations to enter into certain markets while keeping in mind their investment goals and risk averseness.
We enable one to plan for their future. With retirement planning, you are able to plan and understand your expenses in old age and cushion yourself against any financial uncertainty. As we plan to have a family and educate our children, it is very critical to prepare for their future wellbeing.
We also help investors keep track of their assets, whether liquid or fixed. Investors will know where their assets are, how they are being put to use and any changes made to them. Consequently, recovery or transitioning of assets can be done more efficiently, thus, leading to higher returns.
Which emerging trends do you see in wealth management and their impacts on the economy?
The use of data and AI has aided automated advisory. Quality data helps us not only to better understand our clients but also to position the best product for them.
Technology has also made it possible to distribute investment products to a wider market in an efficient and cost effective way. Initially we would need to have multiple physical offices spread across the country to increase our touch points. Today, that is not necessary, because with tech our products can be accessed widely.
Africa’s population grew at an average annual rate of 2.6 percent between 1950 and 2014, much faster than the global average of 1.7 percent as estimated from UN population projection data. Africa will also account for 80 percent of the projected 4 billion increases in the global population by 2100. The accompanying increase in its working age population creates a window of opportunity, which if properly harnessed, can translate into higher growth and yield a demographic dividend. The impact of demographic change could be even greater when combined with investments in areas like food production and nutrition among others.
What is your opinion about foreign investments coming to Africa? How should Africa prepare itself?
Local investors are missing out on huge opportunities that are being taken out by foreign agile investors.
How do you see your business evolving? What’s next for Genghis Capital?
We will aggregate more funds, deploy them prudently and generate more returns for our clients.
We also want to make use of robust investment tools and technological innovation to redefine how business is done, expose our investors to emerging opportunities in the region and create a better quality of life for the people.