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VFD Group: From penny stock to high value investment firm

With two economic recessions within a short period, amid other challenges, especially the Covid-19 virus outbreak, with its impact still being felt today, the last decade was very tough for the corporate world as many companies that started well at the break of the decade are struggling now, while others are moribund.

Yet, there are some that braved the seemingly unending economic headwinds of the decade to stay afloat and even grow their businesses profitably.

VFD Group Plc stands tall among companies that not only survived the first 10 years in business but reinvented, grew their portfolio and attracted global partnerships and attention.

The proprietary investment company with several portfolio companies is a success story of how a Nigerian company can deliver on its obligations to investors against all odds, aligned with world best practices, and being competitive on the global scene.

The Group started off with a concentration in the financial services sector, building some remarkable businesses in the sector, which are operating quite successfully.

But today, it has investment interests in technology, exchanges (NGX & NASD), real estate, hospitality, digital media, power, oil and gas, asset leasing, arts, cinematography, among others. All these are alongside its traditional banking, asset management, and investment-banking core.

Looking back at its days of little beginnings, it has been a case of resilience, determination, and integrity. That is why; from a seed capital of N2.5 million about 12 years ago and shares priced at N2 per share during the company’s initial capital raise, VFD Group Plc has grown and is currently priced at N368 per share in the Nigerian capital market. It has a market worth of N32 billion and investments in over 40 companies across many sectors of the economy. Call it a feat, but it is really an enviable one from a Nigerian company despite many challenges of doing business in the country.

“It is great that VFD Group’s value has gone up. We are currently listed on NASD, and it is available for any stockbroker to buy on behalf of his or her clients”, an elated Nonso Okpala, group managing director of VFD Group Plc, said in a recent interview.

Source: Company presentation to investors and stakeholders

 

For Okpala, VFD Group has reinvented proprietary investment and moved it a notch higher to become what he describes as an “industry-agnostic” proprietary investment company. “This simply means we are a business that continues to seek profitable investment for ourselves and our stakeholders, across different investment options and businesses, regardless of their situated industry”, he explains.

Read also: Real asset with highest investment globally

The decision to become agnostic; a general investment company, according to VFD Group’s GMD, was made about four years ago to redefine the Group’s scope of investment from one that was focused on only financial services to general investment.

Today, that strategic decision is paying off with about 40 investments, which are at different levels of maturity, in different sizes and across different sectors. The most prominent of them, according to Okpala, is Vbank, a digital banking application. He explains that with Vbank, one can open an account and have it active in less than three minutes to transact, receive and transfer funds, as well as have some assets and wealth management products executed on that platform.

Apart from the digital bank, the Group’s magic wand turned around Abbey Mortgage Bank, made Anchoria Asset Management more profitable with an alternative approach to investment, hugely enhanced real estate yield through HEREL, a hospitality company that fuses hospitality business model and the real estate model, and Dynasty Real Estate, which has developed sold-out estates and properties within Lagos and Abuja.

For HEREL, the consistent delivering of a 20 percent yield on investment as against a supposed average 5 percent yield by real estate makes the model a compelling and worthwhile investment for investors.

VFD Group considers investment from a product perspective, from its various target customers’ needs and requirements in the market, and aligns the product to the part of the market where it would sell

Yet, the Group regards its investment in PiggyVest, a technology company, as one of its most interesting investments. Though VFD Group owns about 12 percent of the company, Okpala explains the interest saying, “It is one investment I am quite excited about because it represents the future for us. It will do quite well in redefining how fintech pushes financial services to the next level.”

The GMD’s optimism over the technology company is based on the fact that it was founded and managed by a group of young, enterprising and very bullish smart individuals.

What continues to work for these successful investments is the fact that VFD Group considers investment from a product perspective, from its various target customers’ needs and requirements in the market, and aligns the product to the part of the market where it would sell.

Looking back, Okpala attributes the success so far to many factors. He notes that from the onset, the founders were motivated to meet existential needs of potential customers, which they do even more today.

“First, we were motivated to meet existential needs of potential customers; that was how we started. But more importantly, every single founder of VFD Group believes that we own our purposes, and it is what we make of it that will really translate to reality”, he explains.

But the most important success for him, across the over one decade in business, is helping people to actualize their dreams, hence the Group, according to him, is excited to continue to look for great opportunities, fantastic teams and support people that can really make a difference in their enterprise and pursuit of entrepreneurship.

In summarizing the impact of human capital in the success of the business of the Group, he says, “There are fundamental things. The most important one, is that in investment, you get a huge footprint by putting money in the right places, and you gain a successful footprint by backing the right people, then you gain an enduring footprint by supporting the right people to build exceptional companies.

“So, that is what we do to ensure sustenance in all these companies. We find the right management teams and support them to create value for stakeholders.”

He also did not forget the place of corporate governance in building and growing world-class businesses across board, noting that it is not just a requirement but is an enduring strategy for success in the corporate world. “What we have achieved over the years is because we created a platform for people to make investments and for them to feel assured that their investments are managed in their best interest.”

Speaking further, he insists that to maintain corporate integrity, it is important that people can relate with your initiatives and most importantly, believe that you can act in their own interest.

“Once you can achieve that, any time you call for capital raise, either from the bank or debt market, there is enough governance, integrity, and track records for people to back you up,” he says.

Again, the businesses are modeled and built to last; hence they have survived economic headwinds across the 12 years, especially the impact of Covid-19 pandemic.

The Group started adopting a virtual tradition in its operations with approvals and discussions done via emails, phone calls, chats, and WhatsApp. So, when Covid-19 broke out, it was not a major disruption to its operations, rather it took advantage of it.

Looking ahead, probably for another successful decade in business, he assures that once VFD Group Plc maintains the firepower and the right team to identify the good opportunities, it will keep generating revenue, investing adequately, and generating more value for the clients and the business in many more years to come.

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