Murad Sirkot, the CFO changing the face of investment in South Africa

Murad uses his finance knowledge to steer the research and development committees at Sygnia.

The Visionary CFO Series is sponsored by A2X Markets.

Growing up as one of five boys raised by a single mother who was always struggling to make ends meet, Murad Sirkot never imagined that one day he would be a key player in reshaping the South African investment landscape with a focus on making investing simpler, affordable and more manageable for the average person.

As CFO for Sygnia Asset Management, Sirkot is fully invested in the self-styled disruptor’s vision of radically growing the low-fee passive investment market in South Africa and, crucially, the company’s core mission of making investments accessible to all: “Even though I have been in the industry for many years, I still find a number of savings products confusing and the fees obscure. You have to do a lot of investigation before you finally understand the structure and risk, as well as the exorbitant fees charged by some product providers. It shouldn’t be like this: savings products should be easy to understand and the costs should always be fully transparent.”

He points out that even though passive investments generally outperform active investments, uptake in South Africa has been relatively slow. “In the US, passive investments make up 40 to 50 percent of the industry and they are also gaining traction in Europe. In South Africa, it’s far less, but that is changing rapidly due to more awareness and we expect that passive investments will continue to gain momentum.”

A2X is a stock exchange committed to bringing real growth, choice and value to the South African marketplace.

Like the visionary CFOs featured, the team at A2X understand the importance of making the numbers work for you. Through lower exchange fees and narrower spreads, A2X is able to make significant savings available to the market. Have you empowered your shareholders with the opportunity to capture these benefits?

Pandemic pushes passive investment
Interestingly, Sirkot attributes an increase in passive investment awareness to Covid-19, due to people having more time at home.

“People have had more time to research their investment choices and are attracted to low-cost offerings and consistent performance. Also, people have less money and have to be wiser about how they invest, so it makes sense to switch savings vehicles to lower cost products,” he explains.

Coupled with this, he says, is that passive investment funds have been quick to respond to global investment trends resulting from the pandemic. “For example, more people are aware of the need for better healthcare in the world – our response was to launch another healthcare fund that allows South Africans to invest directly in global healthcare innovation at a low cost.”

Sirkot also predicts local passive investment uptake will be bolstered by stricter regulations that force the long-shuttered investment world to open up. “For example, regulation in South Africa has now made it compulsory to disclose all fees, which for most managers will be a concern from a disclosure point of view as well as implementation. Sygnia, however, has always been transparent about fees and meeting these regulatory requirements is therefore not a challenge for us.”

More than a number cruncher
It’s clear Sirkot views his role as CFO as more than a pen-pushing number cruncher. “I believe a CFO should play a key role in developing the strategy of a company and assisting the CEO in implementing that strategy. The CFO can also be a sounding board to the CEO and senior managers, as well as the board of directors. Other than checking the numbers, the CFO is responsible for providing key financial and risk-related information in order to guide decisions on whether or not to embark on a specific strategy or project.”

Importantly, he believes the CFO should be a key player in research and product development – an area he is particularly passionate about due to the ability to create products that can change South Africans’ savings behaviour from poor to good.

Leading from the front
Pursuing a role in which he could be part of the strategic direction of a company is one of the reasons Sirkot left Ninety One after 13 years of service, where he last held the position of financial manager up to 2018. “I managed most of the global finance team at Ninety One but reported to the head of finance, who in turn reported to the financial director. I was one of many managers but not a director or exco member, and I felt that to reach a level where I could make more direct decisions would take a few years. As CFO at Sygnia, I play a key role in finance, in the business and on the board.”

Aside from needing a change, his other motivation for making the big career move was that Sygnia is a relatively small company compared to the legacy players, but one that is agile, innovative and has massive potential to grow. He wanted to be part of it all: “My mission is to assist Sygnia in realising its full potential – in the medium term, to become a large financial services company and, in the long term, the number one passive investment manager in South Africa and a household brand in the savings market.”

On the retail front, he believes Sygnia is getting there, and fast: “We have gained a lot of retail market share over the last year; in fact the highest retail flows since the inception of Sygnia.”

The company is also making inroads into the institutional investment market, which has long been dominated by the giant asset managers: “Previously retirement funds tended to only appoint the legacy players. This is starting to change as the institutional market has noticed our stellar performance and has realised that we offer simple, high performing savings products at low cost.”

All in all, he concludes, Sygnia’s vision of reshaping the South African investment landscape is gaining rapid momentum, and Sirkot is excited to be at the forefront of what he believes to be a much-needed change.