Office Lives: Abiola Adekoya, CEO and Founder of Artios Capital
Abiola Adekoya has worked in financial services for almost two decades. Prior to establishing Artios Capital, a personal investment advisory, she held senior management roles at leading financial services firms with global footprints such as Renaissance Capital and RMBN Stockbroking. She has provided equities brokerage services to both Nigerian and foreign institutional and high-net-worth investors. Abiola studied Economics at the University of Lagos and has an MBA from Lagos Business School.
She is a Fellow of the Chartered Institute of Stockbrokers of Nigeria. Abiola is on the Board of Directors of the insurance company, Allianz.
“The wise investment is what makes you happy not only when you are making it but more importantly, in five or ten years. It is one that aligns with your personal goals rather than one influenced by the things you see everyone doing”.
As a child, what did you dream of becoming?
I wanted to become a doctor. In fact, I told my parents about my ambition. They were super excited. But my interest in medicine changed when I got to SS1 and I started studying biology. I attended the International School, University of Lagos. I saw enough to quickly realize I would not like to be dealing with blood. So, I went back to my parents and told them about my change of plans. They were not happy but had to accept that I was not going to be a doctor. Despite being scared off medicine, I stayed in the science class.
What was the attraction to studying Economics?
I wanted to study Accountancy. Over time, I observed that I like working with numbers. I have that in common with my dad. I remember that my dad and I would stay up late to work on maths problems. So, I was drawn toward studying something heavy in mathematics. I was admitted to study Insurance but later got interested in Economics which is a broader subject. So, I crossed to the Economics Department. Interestingly, I am now a director at an insurance company, Allianz Nigeria.
What were your favorite subjects in Economics?
Econometrics, Statistics, Quantitative Analysis and any subject that involved calculations. I made As in all of them. But the micro courses were not so brilliant.
Critics say that Economics has gotten too mathematical. Do you agree that we should have more historical analysis and less modelling?
You cannot analyse without data. You need data to project, forecast, look at current trends and past trends. How do you want to talk about growth without data? How do you want to measure growth? What we do in the practical world is to use a simpler language. So, when I am talking to clients, I use terminologies that they would understand. I explain how market forces or demand and supply can influence risk and profitability.
To what extent do you use or have you used your knowledge of Economics in your previous and current roles?
I Economics all the time. As a wealth advisor and in my former roles in banking and stock broking, the premise of everything I have done is macroeconomics. If you do not get that right, anything you do is like building a house on a shaky foundation. The house will definitely collapse. For example, in banking, if I do not understand government policies that affect different sectors, and I start lending to those sectors, I am very likely to commit big blunders. This also applies to stock broking; predicting what will happen on the stock market to my clients without understanding the implications of raising or cutting the Monetary Policy Rate(MPR). You also have to really understand things like forex policy. So, there is nothing I do that I do not have to use Economics. Many people in wealth management or advisory get things fundamentally wrong by offering advisory services without looking at the macro story. An adviser should always keep an eye on the macro story – what is the trend you are seeing, how can you predict the trend, what is on the horizon? As a wealth advisor, when you talk to people, the key value you are offering is to explain trends in the economy and how they affect investments and also be able to predict these trends. You cannot offer good investment advice if you do not know the macro story. What has historically been performing well, is it equities and if so, what sectors? Is it tech, food and beverages, real estate? All these are part of the macro and micro story. You need to have a pretty good idea of all of these before you can advise people about how to invest their money. Analysing and getting insights from the macro is the most important part of my job. I always start my analysis from the macro. This is the first thing I talk about in every presentation to a client. How am I going to justify my recommendations or investment strategies without any analysis of the macro?
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What are the top three things you do to keep up to date with all these trends and sectors?
I subscribe to more than ten analyst reports from the most respected institutions in Africa and from global markets. I also get a lot of reports from my stock broking family, friends, people I have worked with, and analysts. I also follow the financial media e.g., Bloomberg keenly. But it is important to stay ahead of the market i.e., get to know important developments, either risks or opportunities, very early. Analysts reports and media analysis are important but not sufficient. So, I constantly meet with leaders and experts on many sectors. I talk to my friends in fintech, real estate, energy etc., to get updated about current happenings in those sectors. I am very big on information gathering and trend analysis. I also use social media because there are some trends that you might not see in reports but you will find on social media. These could be trends in consumer perceptions or what consumers are buying.
What inspired you to start Artios Capital?
I have always been in the finance industry. I spent the last 15 years in paid employment in stock broking. People always approached me to say, “I have this amount money, please help me manage it”, or they ask me to tell them what to buy. I always said I am a stock broker, I cannot tell you what to buy or manage your money, but I can advise you. These requests became even more frequent in my last two years in stock broking. A lot of my friends, including very senior executives, were asking me how to invest quite sizable amounts of money. I realized that people did not quite know what to do to preserve the value or grow substantial sums they have in their bank accounts. A friend of mine who manages one of Nigeria’s major corporates asked me for investment advice. It suddenly dawned on me that even people who run very big companies and have a lot of money have little idea of what to invest in. That particular conversation was the turning point for me. I decided to establish Artios Capital. There are many people like my friend who are too busy running big companies and have very little time to monitor which stocks are doing well or what else to put their money in. They need someone to take the burden off them and that is where Artios Capital comes in. My mission is to advise people on managing their wealth and ensuring that the wealth that they are accumulating aligns with their future goals. Looking at the person, where they are in life, and what they want or where they want to be in the future comes before what to invest in. My primary loyalty is to who you are, not the asset class or investment to be made. You talk to some people and they are very eager to buy houses. I kind of ask them to calm down and let us first talk through their current priorities and their goals in five or ten years. A mind shift often occurs. Some people realise that they could invest in property without buying a house. Others realise that any kind of investment in real estate does not align with their goals. Some decide it is actually also important for them to travel and see the world. The wise investment is what makes you happy not only when you are making it but more importantly in five or ten years. It is one that aligns with your personal goals rather than one influenced by the things you see everyone doing. Artios Capital focuses on your personal goals and makes sure they align with the investment you make with your income or capital.
Why did people trust you with their money even before you set up as a wealth advisor? Your social side or your professional reputation?
Most of the people who asked me for advice and who are now my clients are either friends or friends of friends. I guess they were impressed by how well I have done in my various roles. They are also aware of the positive testimonials i.e., the people I have advised about investing in one thing or the other over the years who have remained happy with the decisions they made. I have a good record of saying this or that is a good thing to put money in and turning out to be correct. Even when I was in banking, I made it a habit of not only helping clients to push applications for loans but offering quality advice and guidance that made it possible for them to pay back the loans. So, let us say I have a reputation for offering quality advisory and backing this up with practical action plans that have worked for many people.
What is the difference between wealth management and wealth advisory?
They are similar almost up to the point of being the same thing. But wealth advisory is really generic or broad in that it encompasses everybody whilst private wealth management is very niche. Private wealth management is advisory offered to a certain caliber of people. So, when you talk about private wealth management, you are talking about high-net-worth individuals. These are people that essentially tend to have significant amounts of money and they need a lot more handholding or more tailored advice. Their asset sizes are much larger. The volume is a lot more than other people. It is all under wealth advisory, but private wealth management is more niche.
If a 17-year-old girl is listening to you and is excited about becoming a wealth advisor, what are the three most important things you would tell her about how to enter the profession?
I think the first thing I would tell her is to focus on her education. By the way, it does not matter what you are learning, wealth advisory has shifted from just numbers. There are so many components to wealth advisory now because of the phenomenal growth in asset classes. Arts, luxury goods and even music are now asset classes. Many more fields of knowledge are now relevant to wealth advisory. So, whatever she is studying or plans to study, she should be very focused on excelling in it. Secondly, keep an eye on the space and trends in the industry. Be knowledgeable, seek information, find somebody in that space that you like, and follow what they are doing and how they are doing it. Thirdly, be resilient. It will never look like what you think it is going to look like at the beginning. It will never be as pretty as the picture that everyone is painting. But be resilient because very soon the picture will at some point start to change. It is important to give your best to your education as you are learning discipline and consistency.
Is your typical client someone who lives in a detached house in Banana Island?
My typical client is anyone who has some money and wants a better life. Offering quality advice and engaging people to know the best investment for them takes a lot of time so what I get out of it has to be commensurate with the time I put in. But my services are not for only the rich. People, friends or professional colleagues, pool funds for joint investment and come to me to guide them, thus making Artios advisory services very affordable for everyone in the group.
How many hours do you spend in a week meeting clients?
The main work I do for clients is backend. I spend about 10 hours in a week meeting clients. This is by no means an indication of my workload. The real value to clients is in the hours I spend at the backend i.e., analysing opportunities, and meeting partners and the service providers I work with. The partners are people that my clients have chosen to work with based on my recommendations. So, I midwife and manage the process. They include Asset Managers. I do not take money from anyone; my role is looking out for and linking my clients with good investment opportunities.
What is your typical working day like?
I wake up at 7am daily and work out for an hour. Thereafter, I go through my mails from the previous day, plan for the day, set up my meetings for that day and for the rest of the week. I write my daily report every evening till about 11pm. Sometimes, I work until 3am because I have found out I am more productive when it is quiet.
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Do you like to go out for lunch breaks?
Yes, I love food. So, l like lunch breaks.
What is the biggest or best investment you have advised someone to make that really worked for them?
While I was in banking, I had a client who needed a very expensive piece of equipment which could be a game changer for his business. By all means, it was a massive sum to ask the bank. So, he did not really want to proceed. I pestered him to give me more information. I did my analysis and I was convinced that it was a very good business for the bank. I wrote a proposal and I went to see the managing director. The managing director reeled off conditions that the man must meet but I proposed an easier but equally safe way to do the deal. The MD accepted and approved the loan. My client was so shocked when I told him his loan was approved. He now runs a multi-million dollar company.
What is the greater problem with credit in Nigeria- institutional hurdles to lending or staff who are not bold or smart enough to package loans that their bosses would give a nod?
There are many factors. The first factor is that the system initially was not set up for accountability. Many people could get loan from several banks without paying back. This has now become more difficult with the arrival of credit bureau and the Bank Verification Number (BVN). These have made it more difficult for people to go around taking loans that they will not pay. The second thing is the operating environment. Nigeria is a tough environment for businesses. Loans often go bad not because of anything the bank or the customer has done wrong. The bulk of the money banks make is from the interest they charge on loans so a decision not to lend or make loans is a decision not to make money. No bank will make such a decision. Unfortunately, tough economic conditions in Nigeria make it difficult for businesses to make a profit from their operations and repay loans. Ideally, banks should be giving people loans to buy personal or consumer items. But the cost of chasing people to pay back this retail loans when they refuse to pay is very high for a bank. A bank would so rather give N100 million to a single corporate entity rather than break the sum into N100,000-naira loans to 1,000 Nigerians who want loans to buy smartphones. But retail loans are also growing now because banks can check from the credit bureau who has a track record of paying back loans. With the BVN, banks are more certain about the identity of the people they are giving loans to, where they live, etc. Banks are giving out more loans because of the evolving ecosystem. Now, when most of us open our bank apps, we are invited to apply for loans. If the operating environment of business gets better, there will be a massive improvement in consumer credits and even in commercial credit.
Assuming I had $10 million to invest, would you advise me to set up a family office or manage my wealth along with your existing portfolio?
With that amount of money, I would help you build a family office. Someone with that kind of money would have houses in one or two countries and assets in two or three countries. Your goal would be to harmonize everything and make sure that your assets are working well for you and you are sweating your assets to generate as much wealth as possible. The very focused and specialized attention that a family office offers is ideal for someone with 10 million dollars in assets and cash.
If I had N50 million and my goal is to preserve my capital and grow it a bit, what would you advise me to invest in?
I would advise you to put your money in treasury bills. You were very clear, you said you wanted to preserve your capital and grow it a bit. Treasury bills are the safest thing for you.
The returns are not great, but you will be preserving your capital. It’s ideal if you are not keen on returns.
What if I am also thinking I would not want to have a poorer return in five years because of the rate of inflation and currency depreciation in Nigeria compared to someone who decided to put the 50 million naira in an investment in the UK?
That will get a bit more esoteric. We have to look at the macro along with a whole range of asset classes in both countries before advising you. This is a lot more intensive but it is something I am very comfortable doing. I keenly follow economic and market developments in key global markets. I also read reports from top analysts. Many Nigerians today have the sort of anxiety or investment goal you just shared. Any wealth advisor working with high network individuals or Nigerian upper middle classes has to be really aware of what is going on in the major global markets.
Some people have the view that if you invest in property in Nigeria, your return would be inferior to someone who buys in the United Kingdom, Spain or the USA because the naira keeps losing value. Do you agree with this?
In Nigeria, everybody tends to look at property from the point of view of physical property i.e. houses. Land in Nigeria appreciates really well. I remember when a plot of land at places like Ibeju-Lekki and Mowe was N300,000, now a plot of land goes for five million naira or more at Ibeju-Lekki. Land as a property class appreciates a lot faster in value than houses. As a rule of thumb, some asset classes in a place like the United Kingdom do better compared to the same asset classes in Nigeria. But you have to look at things a lot more carefully or holistically. I have seen people make 60% return on Airbnb in a year; this edges nicely against inflation and currency devaluation. We have not had currency devaluation of 50% this year either. I think it has been about 10%.
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Is the property segment something you track actively? And what cities do you focus on?
When it comes to property, I prefer Lagos because I live in Lagos and I understand Lagos structures. However, I am someone who does not shy away from knowledge. For example, I keep track of what is going on in the USA, I keep track of what is going on in the UK. A client might ask to know what is happening in the US market, so you have to be well equipped with information at all time. You cannot say let me go and find out. You have to know that demand has been very high in the property market in the US for the last 24 months so things are a bit overvalued. It is tapering down now. Things are moderating because of fed rates. You need to know all this. Of course, I also talk to experts in these markets to get a deeper view of things which is important to forecasting how the market may move. You cannot just say now I have money, I too need to buy a property in London or Houston. You have to know where the market is and where it is likely to go.
How and where do you like to relax in Lagos?
I love hanging out with my family and friends. But I love food so the activity must involve good food!