Keeping his eye on the prize

Investment manager Kabelo Rikhotso learnt his street smarts growing up in Atteridgeville,  and always wanted to change lives.

The CEO of Royal Investment Managers, Kabelo Rikhotso, is a rising star in the asset management sector.

City Press met up with the executive from Pretoria at the company’s offices in Sandton and experienced first-hand why he is highly regarded among his peers in the industry.

Born in Pretoria’s Atteridgeville township, Rikhotso was raised by his grandparents and had a fairly typical township upbringing. Like other children he grew up with, he had limited exposure to careers outside his community.

“My grandmother used to work for herself. She used to sell and make clothes,” he said of the woman who had the most influence on his life.

“I went through what every teenage boy goes through and, because you are in a township, you have to be street smart and you have to be diligent with your books. Most importantly, I have always told myself to keep my eyes on the prize.”

For Rikhotso, the prize was to become influential.

“I have always wanted to influence and change people’s lives,” he said.

It has become a lifetime passion and something he now excels at.

After matriculating, he headed to Cape Town, where he completed his undergraduate degree – a BSc in mathematical statistics at the University of Cape Town.

He negotiated with his family to return to the same institution to pursue an honours degree in financial analysis and portfolio management.

“I had to convince my family to let me do my honours. I had to explain that I needed to focus and that I needed to stay on my own – no more sharing.

“My family knew I was always good in maths and science, and they believed in me. I am forever grateful for that,” he said.

After graduating, he started his career as a research analyst at asset management firm mCubed.

While there, he enrolled for his master’s degree in financial economics with the University of Johannesburg.

In 2006, he left full-time employment at mCubed to take up a fixed-term contract in Treasury’s inaugural talent management programme.

“Treasury was an opportunity for me to create a niche for myself in fixed income. I did some research and I thought Treasury would be the best place,” he said.

The programme focused on technical skills and also sharpened soft skills, such as dealing with people.

“It was a model that they had seen at Coca-Cola, and they tried to implement it there,” he said.

Speaking of his time at Treasury, Rikhotso cannot help but brighten up. He said it was one of the best places he had worked at during his career of more than a decade. It was there that he worked under current SA Reserve Bank governor Lesetja Kganyago.

“I loved it there. I had a great time. It’s actually one of the places I would not mind going back to. The work they do is very close to my heart.”

He left Treasury and rejoined the private sector after being offered a full-time position as deputy director of market risk at Investment Solutions.

“I actually missed managing money and thought I could be good at it so, when a friend of mine called me about a fixed income position at Investment Solutions, I applied. I went there to meet them and they sent me an offer the next day,” he said.

Nine months after joining the company, he was already heading up equity, fixed income and property investments. By the time he left, he had made a good name for himself.

A friend then approached him with the idea of starting an asset management company of their own. The venture did not last long. Five months into the business, he was recruited by Rand Merchant Investment Holdings (RMI) and Royal Bafokeng Holdings (RBH) who had long been trying to hire him.

In January 2016, RMI and RBH assigned him to set up Royal Investment Managers.

It has a shareholding of 45% in RMI, 45% in RBH and 10% for management.

Rikhotso said it bought minority equity stakes in asset management businesses as a way to build up its portfolio.

“Royal Investment Managers is a holding company and I’m just building a portfolio of assets. These are currently focused on asset management businesses. We could potentially extend it to the entire value chain later,” he said.

Asked why the company’s strategy is to target minority stakes rather than carve out a larger piece of the pie, Rikhotso said: “If you look at the most successful asset management businesses, probably around the globe, they are not run by banks and they are not run by insurance companies. They are run by entrepreneurs – Allan Gray, Coronation and the like,” he said.

Rikhotso said the company was attracted to owner-managed businesses that prioritise transformation.

He said the company decided to partner with some of the smaller asset managers to help them increase their market share.

On transformation in the industry, he believes there are enough graduates who can enter and transform the sector. Evidence of this is the large number of graduates with industry-related qualifications such as bachelor of commerce degrees.

However, he said there was a problem regarding young people getting exposed to careers in the sector.

“Exposure at foundation level and even at university level is quite low because students graduate and still don’t know what asset management is,” he said.

As the CEO of Royal Investment Managers, Rikhotso finally seems to be in a position to do what he has always wanted to – change people’s lives.

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