In the advent of the investment firm’s 10-year anniversary, Momentum Asset Management (a subsidiary of MMI Holdings) Chief Executive Officer, Lesley Rukoro, sat down for an interview with Prime Focus to discuss the company’s growth over the aforementioned period.
What is you perception of the growth, performances, achievements and challenges of the Namibian non-banking financial sector?
Lesley: With specific reference to the asset management industry, substantial growth has been achieved as witnessed by the advancement of contractual and discretionary savings in the country over the last decade or two. The industry now manages in excess of N$140 billion in investments compared to far below N$1 billion at independence. This has created substantial wealth for clients and hopefully brought many people closer to financial freedom. It has also resulted in the creation of auxiliary businesses such as stockbrokers, the stock exchange and custodian businesses. Local capital markets have benefitted from the industry.
Industry challenges has, and will always exist, but largely it continues to be turned into opportunities. Here I am referring to compulsory investment in local capital markets, although still relatively illiquid, it has come a long way from two decades ago. Also, subsequent to valuable learning experiences, unlisted investments are now widely embraced by the industry to support the very noble initiative of employing local capital for Namibia Incorporated and its people.
There is a notion that a good number of Namibians can not afford basic insurance products or are not well sensitised about operations of the insurance industry, what is your take and what do you think needs to be done about this?
Lesley: As the MMI Group, I believe we have historically done very well to provide cost effective products to a wide range of Namibians. Our client facing brands are very well rooted and supported by a very wide range of Namibians in the different market segments. With sustained innovation we will continue to introduce improved and effective products which will be easily accessible.
Momentum Asset Management is celebrating 10 years what do you think are the major milestones for the company?
Lesley: The business is one of the relatively younger investment management businesses in Namibia. It has grown and now manages almost N$11 billion in assets on behalf of clients, up from below N$3 billion in 2009. Two years ago, we were internationally recognised as the fastest growing asset manager in Namibia, a recognition which would not be possible without client support. Also since 2010, we have localised our portfolio administration services in Namibia, thereby allowing clients to deal directly with us with regards to any matters.
As an investment/asset management player, what is your perception about the investment climate in the country?
Lesley: Generally, the investment climate has been very conducive over the last few years, supported by abundance of capital worldwide, expansionary spending by the Namibian government spending as well as the relatively low cost of money resulting from low interest rates. This is evidenced by the number of public and private sector construction projects and an increased trend in spending which has supported the retail sector. Another consideration, which we easily take for granted, is the fact that Namibia is a very beautiful, peaceful and generally well run economy which supports investor sentiment. There is a lot of excitement about our country currently, and possibly for good reason.
Despite these positive factors it is important that we remain vigilant about looming challenges. The pending water and electricity shortages, lower commodity prices and approaching higher interest rates are likely to impact investor consideration in the short to medium term.
What are some of the products that are offered by Momentum Asset Management to the medium class and low income earning bracket in the aim of driving financial inclusion?
Lesley: Well, we basically offer individuals access to our products in two ways. Firstly, through life, savings and risk products which are underwritten by MMI Holdings Namibia. This can be accessed by our wide distribution channel countrywide.
Secondly, through our business relationship with FNB Namibia, clients can access unit trust products, which we invest on their behalf, for as little as N$200/month. There is a suite of unit trust products ranging from very conservative to aggressive. Investors can choose to invest in any of these based on their appetite.
Can you give a brief portfolio of Momentum Asset Management as a company?
Lesley: Momentum Asset Management Namibia is a wholly owned subsidiary of MMI Holdings Namibia. It is an investment management company regulated by the Namibia Financial Institutions Supervisory Authority (NAMFISA) and which manages investments on behalf of various clients. All these investments are regulated and guided by legislation and client or fund specific mandates with investment limits to manage risks and exposures. We take great care to manage client investments within these mandated parameters.
What is your company doing in terms of skills development and capacity building for Namibians?
Lesley: Recognising that our employees are the most important asset, we commit ourselves to provide adequate development and training opportunities for all our employees. We do this through formal as well as informal training.
At MMI Holdings Namibia we believe that our employees come first. If we take care of our employees they will take care of our clients with pride.
Give a bit about the core business focus of MMI?
Lesley: The core businesses of MMI are long term insurance, asset management, savings, investment, and healthcare administration and employee benefits. These product and service solutions are provided through operating brands Metropolitan, Momentum, Swabou Life, Momentum Asset Management and Methealth. Through these products and service we aim to provide financial wellness for clients.
For a company that is celebrating your 10 year anniversary do you think the Namibian market has well received you?
Lesley: Yes indeed, we are well received and very grateful for that. Remember, we initially started out as RMB Asset Management and only rebranded to Momentum Asset Management two years ago. With market support, we now have a very sustainable business which provides an invaluable service.
Nevertheless, the brands which our clients deal with, in addition to Momentum Asset Management, are well entrenched in Momentum, Metropolitan, Swabou Life and FNB Unit Trust.
Most companies are engaged in corporate social responsibility which key sectors do you focus on this aspect?
Lesley: As a Group, social responsibility focus is at the centre of who are. Our dedication as a community partner is evidenced in the local events we sponsor under our client facing brands.
Under our Metropolitan Swabou brand we sponsor Metropolitan Namibia/Swabou Life Summer Cup that has been hosted in Oshakati for over eight years and is regarded as one of the most prestigious sports events in the northern region. The event attracts more than 200 learners from 4 different regions namely Oshana, Ohangwena, Oshikoto and Omusati. This year we are also aiming at including Hardap and Karas Regions respectively. The tournament targeted towards Junior and Secondary Combined Schools in the U/20 age group division, has the benefit of identifying and grooming young talent and facilitating entry into regional and national teams.
Under our Momentum Brand we continue the legacy of developing school’s rugby through sponsorship towards the secondary school’s rugby league. Our Momentum’s brand philosophy extends beyond the financial wellness of its target audience, and emphasized that places value on making a significant contribution through sports such as Rugby and therefore makes a huge social and economic impact on the youth of Namibia.
The league is aimed at showcasing rugby part as a hugely celebrated sport in Namibia in addition to identifying talented players, with a particular emphasis on players from rural areas of the country. This spectacular showcase of raw talent provides these young men with an opportunity to be exposed to higher levels of coaching, refereeing and the game of Rugby in general. The performance of the Namibian Rugby team at the world cup was particularly a proud occasion for us, as players who are now at playing for the country have started in the schools league that we are part of.
Under our Methealth brand we sponsor medical students in partnership with NMC on an annual basis.
How decentralised are your products country wide?
Lesley: Our products are quite decentralized. Access to our life, savings and risk products is catered for under our Metropolitan Swabou brand for the low to medium end of the market, and Momentum Myriad for the medium to high end of the market, and all our distribution channels are catered for across all regions country wide.
Access to the unit trusts portfolios we manage is available through countrywide FNB branches or financial advisors.
Some people do not seem to understand the make-up of your group structure please unpack it for us?
Lesley: MMI Holdings Namibia is the ultimate holding company for our businesses which is listed on both the NSE and JSE. That sits at the top and is not a client facing brand, as it is an Investor brand. So basically when we engage with the regulator and all other legal and statutory stakeholders we would do that under our investor brand which is MMI holdings Namibia. Under MMI Holdings Namibia, there are three subsidiary businesses, the life company (with client brands Metropolitan, Momentum and Swabou Life), the health administration business (Methealth) and the investment business (Momentum Asset Management).
This in line with our vision to be the preferred financial wellness partner with a reputation for innovation and trustworthiness. Ours is a holistic generational financial wellness approach.
Give us a brief breakdown of yourself and your professional qualifications?
Lesley: Born in Otjiwarongo, however in Swakopmund and Windhoek, I studied at the UNAM having majored in Statistics and Mathematics in my undergraduate degree. Thereafter I did a master’s degree in Commerce in Cape Town at the University of Western Cape. I have been working in the investment management industry for 10 years now, 6 of those in my current position.
I’m a family man, and in my spare time I enjoy cycling, swimming and travelling with those that are dear to me.
What do you think about the general Namibian population participation in the non banking financial sector?
Lesley: The asset management business, which manages assets in excess of N$140 billion, is one part of the nonbanking financial sector. A large part of the above amount is contractual contributions which are basically compulsory through employer pension/provident funds. I believe the participation in this component is quite good for employed Namibians, while recognizing the fact that not all employed Namibians have the privilege to contribute to pension/provident funds.
The other component is discretionary contributions, that is, contributions that are made willingly. This largely relates to discretionary savings and investment products as well as to risk products such as life insurance and disability cover. Namibians can easily participate in this component, but can just as easily end participation for various reasons.
Sustained long term participation in both these components is well known to create wealth, especially with significant exposure to equity markets over a long time. You do not need to be very well off to get started, but discipline and patience is required.
Where do you see yourself as a company five years from now?
Lesley: Our business is a custodian of our clients’ financial assets and we aim to sustainably protect and grow these assets to ensure financial wellness for our clients.
This fundamental objective will not change much in five years, but we will constantly aim to improve the way we achieve this. We have recently embarked on a clientcentric outcomes-based investment model in line with our client-centric strategy which sets financial wellness as core value proposition to clients. This business model will be guided by an innovative outcomes-based investment approach. For us this business model is relatively new, but we are excited about the path it will take us over the next few years.
From your perspective do you think previously disadvantaged Namibians are now playing a key role in the non-banking financial service sector either in management or in ownership?
Lesley: I believe that some progress has been made in this regard, but we have a long way to go for deeper meaningful ownership and participation. It is up to us as young black professional to ensure that the vision echoed by president of inclusivity is realised in our lifetime, and the will and drive to achieve is there it is for us to put that drive into action.