Investor with a difference
Meet the man who is in charge of R41bn in hedge funds
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.
Malungelo Zilimbola, CEO of Mazi capital