Building lasting wealth involves balancing risks and returns - Efe Shaire

EFE SHAIRE, co-CEO of AVA Capital Group, discusses the strategy for building lasting wealth in an interview with BusinessDay’s DAVID IJASEUN. He also emphasised the importance of balancing risks and compounded returns, among other factors. Excerpts:

Given your mission to ensure long-term financial success for clients, how does AVA Capital Group differentiate its strategies from conventional investment approaches in the Nigerian market?

At AVA Capital Group, we distinguish ourselves in the Nigerian capital market by aligning investment strategies with client needs and evolving market realities. We adopt a data-driven approach to our businesses, focusing deliberately on best execution and superior service delivery.

Can you elaborate on the types of innovative financial products AVA Capital Group offers that contribute to building a solid foundation for clients’ financial futures?

AVA Capital Group comprises four SEC-licensed businesses. AVA Capital Partners provides investment banking services, including Mergers & Acquisitions, Capital Raising, Underwriting, and Advisory services, ensuring efficient and professional achievement of client objectives.

Our wealth management services, offered through AVA Global Asset Managers Limited, cover portfolio management, estate planning, family office, and corporate/high net-worth individual investments. Our goal is to help clients create, grow, and protect their wealth and legacy.

AVA Securities Limited, a broker/dealer, facilitates the trading of fixed income securities and equities for clients, offering best-in-class execution on all registered trading platforms in Nigeria.

Through AVA Trustees Limited, the Group provides trusteeship services, overseeing assets and managing trusts, estates, and financial structures. This ensures proper administration, protection, legal adherence, and fulfillment of fiduciary purposes.

How does AVA Capital Group tackle economic volatility and inflation challenges in Nigeria for long-term wealth creation?

Building lasting wealth involves balancing risks and returns. We advise clients to adopt a long-term perspective, but to address short-term challenges, we employ strategies like diversification and targeted asset allocation. This spreads investments across various asset classes, aligning portfolios with clients’ risk tolerance and financial goals.

What role does personalised financial planning and portfolio management play in ensuring long-term success for your diverse clientele?

AVA Capital Group prioritises financial planning and portfolio management for its diverse clientele. By understanding individual goals, risk tolerance, time horizon, and objectives, we tailor strategies to meet each client’s specific needs. This meticulous approach to asset allocation ensures well-diversified portfolios.

We implement risk management strategies based on individual clients’ risk tolerance, aiming to mitigate downsides and optimize returns. Regular reviews ensure portfolio alignment with client goals and adaptation to market and personal circumstances, especially in Nigeria.

Your firm has achieved impressive growth with over N195 billion in raised capital. What key strategies have fuelled this success, and how do you plan to sustain this momentum in the future?

AVA Capital Partners, the Investment Banking arm of AVA Capital Group, has successfully raised over N200 Billion in capital in the past few years. This feat is a result of the expertise, hard work, and experience of our team. Having the right people has been a major driver of our success. Similarly, maintaining such a feat requires commitment, discipline, and focus, intrinsic values at AVA Capital Group.

With over 1,300 satisfied clients, what are the core values and client-centric practices that have fostered such strong trust and loyalty towards AVA Capital Group?

Our success as an organization and as individuals is driven by our commitment to excellence. We focus on details, innovate, and strive to outperform competition fairly, delivering the best returns to our clients. We believe in the relentless pursuit of excellence in execution, working with passion, utilizing innovation, and moving with speed and dexterity because time is our most valuable resource. We are forward-thinking, proactively seeking ways to do things more efficiently and maintaining effectiveness in these rapidly evolving times. We hold ourselves to the highest ethical standards, built around the 6 pillars of character; Trustworthiness, Respect, Responsibility, Fairness, Caring, and Citizenship. We are initiators, constantly pursuing solutions to life’s daily problems, with a collective focus on providing sustainable value to our clients and the communities we serve.

With ambitions to revolutionize the financial landscape in Sub-Saharan Africa, how does AVA Capital Group use technology for efficient and accessible financial services?

In today’s business landscape, automation is crucial for prompt service. Embracing innovation in the fast-evolving technological era, we’re reshaping traditional financial services to foster inclusion. Strategic tech integration enables us to serve a broader clientele efficiently. By leveraging Enterprise Resource Planning software, we’ve automated operations, ensuring swift service and heightened client satisfaction. Exploring optimal use of Artificial Intelligence is a key focus.

In your expert opinion, what sectors offer promising investment opportunities in the current Nigerian economy, considering risks and rewards?

Nigeria’s dynamic economy is shaped by government policies, global conditions, and domestic challenges. Promising sectors amid risks include agribusiness, technology, and telecommunications, capitalizing on the growing and tech-savvy population. Healthcare shows potential in pharmaceuticals, services, and medical tech. Power, renewable energy, and real estate sectors offer diverse investment avenues. Despite challenges like inadequate infrastructure and economic uncertainties, financial services, including banking and insurance, provide opportunities in both traditional and digital realms.

What is your assessment of the impact of recent government policies and economic reforms on Nigeria’s investment climate, and how is AVA Capital Group modifying its strategies in light of these changes?

The new administration’s pro-market policies, including subsidy removal and FX market liberalization, have led to spiralling inflation and persistent Naira devaluation. Investors

now face the challenge of protecting their portfolio’s real value against these tough macro economic realities. The trend of benchmarking Naira portfolios against USD adds complexity, necessitating sophisticated currency hedging strategies in portfolio management.

At AVA Capital Group, we’ve expanded our offerings to meet these challenges. Our Dollar fund, for instance, was 2023’s second-best performer, providing a natural hedge and yielding returns above conventional products. Our value-add in portfolio management strategies contributed immensely to this return generation for our investors.

We are also investing in infrastructure, launching a NGN 200 billion programme to finance Nigeria’s infrastructural needs and offer attractive yields in private credit. AVA Capital Group recognizes the vital role of infrastructure investment in Nigeria’s development. We also align with the shifting global landscape where private capital is evolving to be a key driver for infrastructure investing.

Furthermore, our infrastructure fund addresses the currency mismatch in capital projects for businesses through Naira-denominated financing. This strategy streamlines capital allocation and reduces currency risks. Additionally, we’ve innovated in the fixed-income space with a product offering floating returns plus a 3% – 5% margin, indexed to comparable 10-year FGN bonds. This approach aligns investment returns with economic conditions, offering protection against rising market rates.

What role do you see ethical and sustainable investment practices playing in the future of Nigeria’s financial sector, and how is AVA Capital Group contributing to this movement?

Ethical and sustainable investment practices are integral to shaping Nigeria’s financial future amid growing global awareness of ESG issues. Recognizing this, regulatory amendments by bodies like the Securities and Exchange Commission (SEC) underscore the commitment to enforce such practices, fostering a competitive and inclusive financial landscape.

These efforts are expected to drive innovation, leading to the emergence of green financial products and sustainable bonds. AVA Capital Group’s dedication to sustainability is evident in the recently approved AVA Infrastructure Fund. This fund seeks to address Nigeria’s infrastructural deficits, contribute to socio-economic impact and align with the broader movement towards ethical and sustainable investment practices.

Beyond financial services, how do you contribute to the development and well-being of the communities it operates in, aligning with its commitment to nation-building?

AVA Capital Group channels its Corporate Social Responsibility (CSR) through the Prosperis Empowerment Foundation. This initiative aims to combat poverty by supporting petty traders and enabling them to scale their businesses in size and scope. The foundation provides accessible uncollateralized loans, financial education, interest free and subsidized interest rate loans to empower petty traders in their respective markets.