Richard Muriithi, 30, is an investment analyst at Old Mutual and one among a group of finance professionals in Kenya who have earned the Chartered Financial Analyst (CFA) designation. Earlier this year, he mentored a team of five university students through their participation in a global CFA competition that saw them represent East Africa in Italy. EDNA GICOVI tells his story.
Richard Muriithi is a man of quiet confidence. He comes across as someone who takes a great deal of effort to speak about his own achievements, even though widely recognized for them, because he doesn’t consider these a big deal. He just turned 30. In fact, this interview took place on his birthday. Despite this being a regular workday for him in addition to his birthday, he was more than willing to indulge me.
Richard already had a hunch on the direction his life would take from an early age. “I knew from the get-go that I would end up in the finance world. My dad was a career banker and as they say, the apple doesn’t fall far from the tree. It’s an interest I had and perhaps it was in the genes,” he says with a brief smile. His interest in investments also dates back to his earlier years when he saw his father receiving dividend cheques and his mother buying shares.
After his high school years at the Alliance High School, his father would have him and his siblings attend annual general meetings for listed companies in turns, a most interesting activity for Richard. He fondly recalls donning his favourite Christmas suit to attend these meetings and keenly listening to the various conversations taking place. Seeing top executives from banks and other institutions questioned on how various funds under their care were allocated taught him the importance of accountability.
While studying actuarial science at the University of Nairobi, he was fortunate to get extensive experience in his field through a variety of internships he took on during semester breaks at Pine Bridge Investments, formerly AIG Kenya Ltd, Alexander Forbes and Dyer and Blair Investment Bank. Through these, Richard was able to narrow down on an area of interest in his field. “I was certain I wanted to pursue investments after my second year,” he says.
“The actuarial profession tailors you to fit into any organisation where there are risks to be managed. An actuary can add value across all fields of finance, whether insurance, banking, or pension administration, among many others. There are many different options that the skills can be adapted to. I think that was the main advantage of studying the discipline; the fact that you are versatile,” he continues. He however adds that actuarial science is a demanding course. “We didn’t keep the typical university student’s schedule. The course really requires you to put in the time,” he adds.
No risk, no reward…
Richard joined Old Mutual Investment Group, a global investment, savings, insurance and banking group, in 2010. The firm manages assets in excess of one billion dollars. He is a member of the investment team, playing the role of investment analyst. His day-to-day work involves identifying sound investment ideas and undertaking the analysis required to make the investments. “I started off making recommendations on the stocks the group would invest in. Your role as the analyst is to create a pipeline of investments and interrogate the merits of each for inclusion into portfolios,” he says.
Investing may, to some extent, seem like a game of chance to many but it’s all in a day’s work according to Richard. As an investment professional, risk is an everyday affair. “Risk is perceived as a negative thing. The word implies danger. For you to get a reward, you must take a risk. Think about a child learning to walk who up till then has been mostly seated. She starts off standing and, though skeptical at first, she eventually starts taking small, unsure steps. It is a risk to take that first step as a child but now as an adult, as you walk and run you do not even think about it. Risk is a beautiful thing. Life is all about taking chances,” he says.
On the other hand, risks are not to be taken arbitrarily but with the backing of careful research. Richard goes on to say that when looking to invest, one also has to be informed of current affairs, both locally and globally, in order to understand what forces are shaping the country’s or region’s development and therefore tailor investments to benefit from these trends.
Working at Old Mutual has continually challenged him to strive for excellence in his work and also given him the opportunity to learn and grow. He appreciates the chance to work and interact with renowned professionals in the field, some with decades of experience. His analyst responsibilities have also grown. “I’m now analysing and recommending instruments across the investment spectrum, both private and public. The investment jurisdictions I attend to have also broadened, working with our Pan Africa investment fund out of Capetown,” he says. In 2013 when Old Mutual acquired 70 per cent of Faulu Kenya, a micro-finance company, he worked within the Old Mutual Africa transaction team that executed the deal, which included the Group CEO Tava Madzinga.
Becoming a Chartered Financial Analyst…
Richard is a Chartered Financial Analyst (CFA), a professional credential offered internationally by the American-based CFA Institute. “It is a rigorous education in investment management. It has three exam levels and each, except level one, is administered once a year globally,” Richard explains.
The CFA Charter is generally thought to be a difficult test, with fewer than 20 per cent of successful candidates passing all three exams on their first try. He says that a lot of sacrifice and discipline is required when studying and preparing for these exams, especially if one is working and studying concurrently. In the course of his studies, he was greatly encouraged by other Kenyan professionals who had earned the investment designation. “I thought that if they could do it, then I could as well. Right now we’re about 60 in the country and we’d like to see that number increase. More people are taking an interest in it. The designation makes you a well-rounded professional in the investment field. It’s a leveler in terms of demonstrating your understanding of investment decision making,” he says.
An industry mentor…
Every year the CFA Institute organises the CFA Institute Research Challenge, a worldwide competition where university students work in teams to analyse publicly traded stock. The winner from each local level advances to the regional level and if successful, the global final, where one team emerges as the global winner of the competition. A participating team, once formed, is allowed one-hour sessions for a maximum of six meetings with an industry mentor, so as to learn the principles of financial analysis and apply them to the business case they plan to present. They are also allowed to consult with a faculty advisor from their school but only for a total of 10 hours.
In January this year, Richard was pleased to receive an invitation to be an industry mentor to a team of participating students. He mentored students from his alma mater, the University of Nairobi, as they prepared an investment recommendation on one of the listed companies on the Nairobi Securities Exchange. “They were tasked to perform a financial analysis of the company, write a 20-page investment report then make a presentation of this. My students would come to our offices after hours where we would have our time together,” says Richard.
The team he mentored won the local level of the competition in March and together with The University of Capetown represented Africa in the Europe, Middle East and Africa regional contest in Milan, Italy. “Being in Milan with so many other dedicated student teams was a great experience for all of us. Our team was knocked out before the finals of the regional contest but the students gained valuable knowledge, exposure and experience that they may probably never have received from a classroom,” he says, adding that some of them have now enrolled for the rigorous pursuit of the CFA after realising the immense potential they have within themselves from their participation in the competition. Teaching has always been a passion for Richard and he enjoyed mentoring the team immensely. He looks forward to lecturing candidates pursuing the CFA designation in the near future.
Richard also hopes to continue using his skills in a way that contributes to realisation of the immense economic potential that Africa has. In his free time, he enjoys site seeing, theatre, reading with his nieces, spending time with his wife, Suki, his family and his close friends. “There is always room for improvement in everything that we do. Strive towards excellence,” he says in conclusion.
Published in August 2014