In­vestor with a dif­fer­ence

Meet the man who is in charge of R41bn in hedge funds

CityPress - - Business - LESETJA MALOPE lesetja.malope@city­press.co.za

Chief in­vest­ment of­fi­cer and founder of Mazi Cap­i­tal, Malun­gelo Zil­im­bola, is a ground­break­ing pi­o­neer in an in­dus­try that re­mains largely de­void of black faces. He was born into a farm­ing fam­ily and grew up in North West, thou­sands of kilo­me­tres from his fam­ily roots in the East­ern Cape. He went on to qual­ify as a quan­tity sur­veyor in the early 1990s – but he even­tu­ally settled in the fi­nan­cial ser­vices sec­tor.

Zil­im­bola’s life has been unique in many ways.

“I have al­ways wanted to be dif­fer­ent,” Zil­im­bola said. In­deed, his career path has been noth­ing but dif­fer­ent.

He started his pri­mary school­ing at Rosendal Pri­mary in Mak­ous­pan vil­lage in Ngaka Modiri Molema mu­nic­i­pal­ity in North West and went on to ma­tric­u­late at the lo­cal RA Kobuwe High School in Mooi­fontein. He then headed off to the Mother City to pur­sue a de­gree in quan­tity sur­vey­ing.

“I was at­tracted to quan­tity sur­vey­ing be­cause of its com­bi­na­tion of tech­ni­cal and com­mer­cial as­pects. That mix is what re­ally ap­pealed to me,” he said.

Af­ter grad­u­at­ing at the Univer­sity of Cape Town (UCT), he joined the prop­erty de­vel­op­ment sec­tor, but his stint was short­lived af­ter the en­tire in­dus­try faced tur­bu­lent times when the mar­ket crashed in 1998. “With interest rates up to 25%, no one was will­ing to put their money in prop­erty at the time. In­vestors would rather put that money in a bank and get the 25% than in a de­vel­op­ment. Re­mem­ber also that that sec­tor is project-based – you build and develop and move on, so there was no work,” he said.

Zil­im­bola found him­self back at var­sity, this time to pur­sue a Bach­e­lor of Com­merce hon­ours de­gree and it was that tran­si­tion that opened op­por­tu­ni­ties for him.

“I was head­hunted by In­vestec while still at UCT. What they did was re­cruit the top three stu­dents in my hon­ours class and I was part of that,” he said.

Three years later, he joined Rand Mer­chant Bank (RMB) as a se­nior port­fo­lio man­ager and, an­other three years down the line, he jumped ship to open his own shop.

He started Mazi Cap­i­tal as the coun­try’s first black-owned hedge fund man­ager with only six years’ ex­pe­ri­ence. Eight years later, he is be­ing ac­knowl­edged by in­dus­try peers as one of the best, with ac­co­lades. Zil­im­bola’s jour­ney, though not a bed of roses, has been one filled with care­fully cal­cu­lated risks. His at­ten­tion to de­tail and pre­ci­sion have earned him the ut­most re­spect of his peers.

When he re­signed at RMB – where he man­aged al­most R60 bil­lion – in 2006 to start the com­pany, he was pre­pared to go 18 months with­out a salary, but Mazi broke even within six months.

Mazi, which is a Nguni word for a fe­male cow, man­ages R41 bil­lion in hedge funds, unit trusts and seg­re­gated in­sti­tu­tional funds. He has also ven­tured into Africa and has plans to go global in the next few months.

Faced with the task of con­vinc­ing clients to trust him with their money, Zil­im­bola was for­tu­nate enough to have those that gave him a chance with­out his hav­ing the in­dus­try norm of a three-year track record. “Though I had more ex­pe­ri­ence than that, the track record was not that of Mazi Cap­i­tal and some would doubt me,” he said.

He cred­its his in­vest­ment process of care­fully eval­u­at­ing com­pa­nies and not be­ing afraid to make a wrong call as qual­i­ties that give him the edge. “We make wrong calls every day. As long as at least 60% of the de­ci­sions are right to over­com­pen­sate for the wrong ones.”

Turn­ing to the lack of trans­for­ma­tion in his sec­tor, Zil­im­bola said: “We have the right le­gal frame­work; the prob­lem is the im­ple­men­ta­tion and en­force­ment of the frame­work.”

The fund man­age­ment sec­tor has only 4.6% mean­ing­ful black par­tic­i­pa­tion af­ter more than two decades fol­low­ing the end of apartheid.

He pointed out that there was a mis­con­cep­tion that most of the money in this coun­try be­longed to white peo­ple.

“That is totally wrong, be­cause the biggest funds [are in the hands of] the Gov­ern­ment Em­ploy­ees’ Pen­sion Fund, the Eskom fund, the Transnet fund and unions such as the Na­tional Union of Metal Work­ers of SA. All of that is black peo­ple’s money,” he said.

He said the mind-set of the big, listed com­pa­nies was also wor­ry­ing in that their in­vest­ment trends seem to be con­cen­trated at the same lo­ca­tions or over­seas.

Zil­im­bola counts the pres­ti­gious Morn­ing Star and Rag­ing Bull awards won in 2013 and 2015 as the high­lights of his career.

He looks up to bil­lion­aire in­vestors War­ren Buf­fett and Ge­orge Soros as in­spi­ra­tional busi­ness fig­ures and has es­tab­lished a graduate train­ing pro­gramme within the com­pany to men­tor and groom as­pir­ing young black fe­male fund man­agers.

PHOTO: LESETJA MALOPE

Malun­gelo Zil­im­bola, CEO of Mazi cap­i­tal

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