JOHANNESBURG - The slow pace of transformation in the stockbroking industry has spurred a goal-driven businessman to start a securities firm as a springboard to venture into entrepreneurship.
Mzwakhe Nhlanhla founded Khumo Securities, a fully fledged institutional stockbroking firm trading for international and local asset managers and hedge funds. The company is a member of the Johannesburg Stock Exchange.
Nhlanhla, who is the company’s chief executive, is also the principal and founder of investment holding company Smith Barney Capital (SBC) which acquired a 51 percent majority shareholding in Khumo.
“We believe that this will be a platform for showcasing black talent, training young professionals, and achieving a more inclusive financial services industry,” says Nhlanhla.
The businessman holds a BSc in economics and mathematics from Wits and a diploma in Business Administration from the Gordon Institute of Business Sciences.
He says the firm’s management and control is now firmly under the consortium’s authority.
The 34-year-old entrepreneur is an old hand in the industry, having held management positions at several private sector companies including Vunani Securities, Kagiso Securities and Investec.
Nhlanhla says Khumo has been well received by the industry.
He says the stockbroking industry has a value chain of R9 trillion but few black asset managers.
“Of the average daily traded volume, the black traders constitute less than 5 percent. Obviously, that’s a cause for concern,” says Nhlanhla.
“We have been well received and a lot of people understand the struggles of being a businessperson in a space that’s well protected by those with connections.”
He says the industry has been characterized by a slow pace of transformation with structural impediments that prevent black businesses from flourishing.
“Why can’t we have a company like Coronation one day, that is born out of an idea from people from Soshanguve, Soweto and the other townships? That would be great.”
However, he is cognisant of the fact that that will not come easy. “It’s not going to be given to us blacks for free. We’ve got to go and take it,” he says, adding: “And I don’t want that to be understood in a wrong way. We have got to work hard to achieve it.”
Nhlanhla, who grew up in Leandra, Mpumalanga, says he was always on the lookout for opportunities to participate meaningfully in the stockbroking sector.
“It’s very restrictive and cumbersome to run a stockbroking firm,” he says.
“You need to have capital adequacy in place and it can be very restrictive because this is a highly regulated sector with the old boys’ club dominating the industry.”
He says his vision is to grow the company into a big investment firm that will be able to compete with established players such as the PSG Group
“That company is something to admire and aspire to, if you look back to 1995 when they started out to where they are today.”
“Our business is South African. Inasmuch as we would like to increase our footprint in other regions, we would like to close the gap here at home first. Then we can expand to Sub-Saharan Africa.”
Part of the plan, he says, is to grow through acquiring businesses that are complementary to what Khumo does.
“We want to find a disruptive way of doing things. Things have to change and in order for them to change you have got to have gravitas, vision and a thick skin.”