Thursday, February 29, 2024

Justus Kenyoru: How I learned to balance risk when saving and investing my money

Justus Kenyoru is the Head of Finance at SGA Kenya, a leading private security firm with presence in the East Africa region.

My role entails managing all financial activities of SGA Security in Kenya. This is in order to grow shareholder value through developing and implementing various financial and operational strategies.

With a responsibility of leading a team of about of 40 accountants, credit controllers and procurement staff across the country, the position comes with challenges of managing diverse team members in terms of age, location and work experience.

The increase in cost of doing business is a big challenge. In most cases we are unable to pass these additional costs to our customers. Devaluation of the Kenyan shilling has also been a big challenge impacting on other costs such as fuel and price of imported items as well.

These changes have created challenges with cost overruns and huge losses for our businesses pushing us to consider restructuring and job cuts to remain sustainable.

I have held other roles before in my career. My first employment was in the year 2006 when I joined the banking industry where I worked in the finance and compliance functions.

I later joined a leading professional services firm as a senior consultant and subsequently worked for a private equity firm as the Head of Portfolio Management. The experience from my previous positions has been quite useful in executing my current role.

One of my biggest money mistakes was taking highly risky investments without proper due diligence, and without forecasting future developments or challenges that may arise. Being driven to invest because the venture seems to be profitable. I invested in a business that involved money lending because the returns looked promising.

At first, the returns were consistent and very good for business. What I did not do was lay down pros and cons of running such a business, especially one that did not have regulations.

Regulations came, and borrowers took advantage of this and decided not pay their loans. I ended up losing money, and this made me change my approach to investment.

My biggest career moment was joining SGA Security as the Country Head of Finance in Tanzania. Eventually, I moved back home in Kenya where I hold a similar role. In the year 2014, the board was looking for someone to steer the finance function to the next level given that our business in Tanzania was growing and the finance function needed to play a critical role in steering the company towards its goals such as revenue growth and sustainability.

During my career in Tanzania, we grew to become a market leader, a position that we continue to strengthen.

Another key highlight is being part of the current leadership tasked with the transformation of our business in Kenya. Our brand is now stronger, and we continue to grow our market share and build a more sustainable business into the future.

If I could start all over again, I would definitely take more time before making any key investment decisions. This would mean doing a lot of research, looking at market trends, seeing what has worked and what has not worked, and the pros and cons of that particular investment.

Breakdown of how I spent Sh. 4mn on this 4-bedroom precast panels mansion

Looking back, there are some investment choices that could have been better if I had taken more time before making the decisions.

I have learnt to diversify my investments. But before I do this, I ensure that I have investment opportunities that are commercially sound and ready before money is available in form of savings.

Previously, I would wait for resources to be available for investments and savings, this can be challenging in an environment where opportunities for spending are unlimited hence one can easily spend any money that may be available unless the investment opportunities are readily available.

Always balance risk and returns when choosing any form of investments. As I was taught in business school, younger people tend to be risk seekers in their approach to investment decisions, however I have learnt that sometimes in life, a trade-off between returns and risk is necessary.

Additionally diversifying or spreading your savings/investments across several asset classes is important. Working in finance means being alert and up to date with the constant changing regulatory framework as well as stiff competition in the market.

Recently, there have been significant changes at both the macro and micro economic environment such as increasing labour costs, taxation and other regulatory compliance costs.

A version of this profile feature on Justus Kenyoru was also published in the Saturday Magazine. The Saturday Magazine is a publication of the Nation Media Group.

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