The new Managing Director of Sycamore Investment and Asset Management Limited, Gbenga Magbagbeola, explains how his firm is tackling long-standing gaps in the investment landscape, why financial literacy remains critical, and what the industry must do to win back public trust, in this interview with OLUWAKEMI ABIMBOLA

As a capital market expert now leading Sycamore’s newly SEC-licensed asset management division, what specific market gaps do you see that larger, more established asset managers have not addressed for Nigerian investors?

The Nigerian asset management landscape has traditionally catered for high-net-worth individuals and institutional investors, leaving many potential investors underserved. I see three critical gaps we’re addressing at Sycamore. First, accessibility remains a major challenge. Many Nigerians perceive investment as something reserved for the wealthy, with high minimum entry requirements creating barriers. At Sycamore, we’ve designed investment solutions with significantly lower entry points, democratising access to sophisticated financial instruments.

Second, traditional asset managers often overlook the need for investor education and transparency. Many Nigerians don’t invest because they find the process intimidating or complex. Our technology platform simplifies investing through intuitive interfaces and clear communication, helping customers understand their investments.

Finally, there’s insufficient innovation in product offerings that address current economic realities. With inflation and currency fluctuations being primary concerns for Nigerians, we’re introducing a USD-denominated investment product that helps preserve value while providing attractive returns. This product directly responds to current market conditions in ways many established players haven’t.

The firm is majorly renowned for providing funding for SMEs through its peer-to-peer lending platform. What inspired that approach and the founding of Sycamore?

Sycamore was founded in 2019 to solve persistent financial challenges in Nigeria and Africa. The founders—Babatunde Akin-Moses, Onyinye Okonji, and Mayowa Adeosun—identified a significant financing gap for SMEs, the backbone of any thriving economy, and yet, they struggle to access affordable capital through traditional channels.

They recognised that financial innovation could create win-win scenarios: connecting investors seeking returns with businesses needing capital. By leveraging technology to reduce operational costs and streamline processes, Sycamore made lending more accessible while generating attractive returns for investors.

This initial focus on lending has built a foundation of trust with nearly 300,000 users and demonstrated our commitment to financial inclusion. Our expansion into asset management represents a natural evolution rather than a pivot, responding to our customers’ growing demand for more diverse investment options beyond lending. Both business lines share the same fundamental mission: empowering Africans to achieve their financial aspirations through innovative, accessible solutions.

What unique challenges have you encountered in transitioning to a technology-driven investment platform, and how are you addressing the technical aspects of modern portfolio management?

One significant challenge has been developing systems robust enough to handle market data analysis while remaining accessible to users with varying levels of internet connectivity. Our team has addressed this by creating lightweight mobile applications that can function efficiently even in low-bandwidth environments, ensuring our services remain accessible to customers regardless of location or network quality.

On the portfolio management side, we’ve invested heavily in proprietary algorithms and artificial intelligence capabilities that analyse market trends and optimise asset allocations across multiple currencies and asset classes. This technology enables us to be more responsive to Nigeria’s dynamic market conditions and deliver personalised investment strategies at scale.

Data security represents another critical challenge, especially given the sensitive nature of financial information. We’ve implemented institutional-grade security protocols and obtained regulatory approvals to protect customer assets and information to the highest standards.

Building these systems is substantial in technical complexity, but the effort is worthwhile because it enables us to democratise access to sophisticated investment solutions that were previously available only to institutional investors.

With Sycamore’s focus on making sophisticated investment solutions more accessible, how are you reimagining risk management approaches for a broader, potentially less financially experienced investor base?

Reimagining risk management for a broader investor base requires balancing sophistication with simplicity. Our approach has two key components.

First, we’ve developed an intuitive risk assessment process that helps customers understand their risk tolerance through simplified questions that capture their financial goals, time horizons, and comfort with volatility. This forms the foundation for tailored investment recommendations that align with each client’s unique profile.

Second, we’ve reimagined how risk is communicated. Traditional risk metrics can be intimidating or meaningless to new investors. Our platform translates complex concepts into understandable terms, using visual representations and real-world scenarios to illustrate potential outcomes.

By combining sophisticated risk management techniques with user-friendly interfaces and educational components, we create an environment where investors can make informed decisions aligned with their financial goals and risk capacity.

Recently, Nigerians lost huge sums of money to a Ponzi scheme and have lost a significant amount in the past to these pyramid schemes. In your opinion, what factors drive this craze for ‘quick money’?

The persistent appeal of get-rich-quick schemes stems from several interconnected factors in our socioeconomic environment. Economic pressures, particularly high inflation and currency depreciation, create genuine anxiety about wealth preservation. When people see their savings losing value in real terms, they become more susceptible to promises of extraordinary returns. There’s also a significant knowledge gap regarding legitimate investment options. Many Nigerians don’t understand how genuine investments work or lack awareness of regulated alternatives. This information vacuum is filled by misleading narratives from scheme operators exploiting financial illiteracy.

Social factors play a critical role too. The visible success of early participants in these schemes creates powerful social proof, especially when friends and family members appear to benefit. This is amplified by social media, where aspirational lifestyles are prominently displayed, creating pressure to achieve similar financial success quickly.

Additionally, there’s sometimes an unfortunate trust deficit regarding formal financial institutions. At the same time, regulatory oversight has historically struggled to keep pace with evolving schemes, allowing operators to exploit loopholes or operate briefly before disappearing.

As investment professionals, we have a responsibility to address these factors through education, transparent operations, and delivering legitimate value that builds long-term wealth rather than promising unsustainable returns.

Are there ways to curb the appetite of Nigerians for get-rich-quick schemes?

Addressing this challenge requires a multifaceted approach. Financial education must be at the forefront, teaching fundamental concepts about compound interest, risk versus return, and realistic timeframes for wealth building. At Sycamore, we’re investing in educational content that helps customers understand that sustainable wealth creation is a disciplined process rather than a sudden event.

Regulatory bodies like the SEC must continue strengthening enforcement and increasing public awareness about licensed versus unlicensed operators. The recent enhancements to the Investment and Securities Act are positive steps in this direction.

Financial institutions must innovate to make legitimate investments more accessible and engaging. If regulated products remain exclusive or confusing, alternative schemes will continue filling the gap. We’re addressing this by creating investment products with low entry barriers, transparent fee structures, and intuitive interfaces that make the investment process more approachable.

Success stories that highlight realistic wealth-building also have a role. We can shift cultural narratives around wealth creation by showcasing individuals who have achieved financial goals through disciplined, legitimate investment approaches.

The solution isn’t simply telling people to avoid schemes; it’s building better alternatives and ensuring people understand how those alternatives create sustainable value. This is precisely what drives our mission at Sycamore.

The International Monetary Fund has cut global and Nigerian growth rates. What does that signal for the business conditions in Nigeria?

The IMF’s downward revision of growth forecasts reflects complex macroeconomic challenges, both globally and within Nigeria. These projections signal a continuing period of economic adjustment as recent policy reforms, particularly the exchange rate unification and fuel subsidy removal, work their way through the system.

In the short term, businesses face significant headwinds: higher operating costs due to inflation, increased borrowing costs from tighter monetary policy, and pressure on consumer spending power. These conditions create cash flow challenges, especially for SMEs lacking substantial capital reserves.

However, these challenges are part of necessary structural adjustments that can create more sustainable economic foundations. The reforms addressing long-standing economic distortions could attract increased investment and create more resilient business conditions.

This environment underscores the importance of diversification and capital preservation strategies for investors. The current conditions highlight the value of FX-denominated solutions, which hedge against local currency fluctuations while generating returns that can outpace inflation.

While current conditions remain challenging, businesses that can navigate this transition period, particularly those focusing on essential services, export-orientated sectors, and digital transformation, will emerge stronger as the economy rebalances and returns to a growth trajectory.

What strategies have been most effective in scaling Sycamore’s operations in this climate?

Three strategies have proven particularly effective in this challenging economic climate for Sycamore’s growth. First, our technology-first approach has been crucial. By leveraging automation and data analytics, we’ve achieved operational efficiencies that allow us to serve more customers without proportional increases in costs. This technology foundation enables us to scale while maintaining competitive pricing despite inflationary pressures. Second, our focus on customer-centricity has driven organic growth through referrals. By continuously refining our products based on customer feedback and investing in exceptional support, we’ve built strong loyalty that translates to customer advocacy. This approach has been far more capital-efficient than aggressive marketing in an uncertain economy. Third, our strategic diversification into asset management, now formalised with our SEC license, has strengthened our resilience. We’ve expanded our value proposition by offering complementary services that meet different customer needs while mitigating concentration risk.

These strategies have enabled us to grow our assets under management to over N10 bn and expand our customer base to nearly 300,000 users. Our approach emphasises sustainable growth rather than rapid expansion at all costs, building institutional-grade infrastructure and compliance systems that support long-term scale while protecting customer interests.

The newly passed Investment and Securities Act has formally recognised digital assets, e.g. cryptocurrency, a space where Nigerians have been playing for so long. What does this recognition mean for this segment of the market and capital market generally?

The updated ISA’s formal recognition of digital assets represents a significant milestone for Nigeria’s financial ecosystem. This regulatory clarity brings legitimacy to a sector that has seen substantial informal participation by Nigerians seeking alternative investment avenues and protection against currency volatility.

This recognition will likely trigger several positive developments for the digital asset segment specifically. We should see increased institutional participation as regulatory compliance pathways become clearer. This formal structure will also enhance consumer protection by distinguishing between legitimate operators and fraudulent schemes, addressing a significant vulnerability for retail investors.

For the broader capital markets, this represents an important modernisation that acknowledges evolving investor preferences and technological innovation. The integration of digital assets into the regulatory framework expands the investment universe available for Nigerians and creates new opportunities for product development.

This development aligns with Sycamore’s mission of increasing financial inclusion through technology. While we focus on traditional asset classes like equities, fixed income, commodities, and currencies, the regulatory recognition of digital assets demonstrates Nigeria’s commitment to embracing financial innovation, a principle that underlies our approach to asset management.

Looking ahead, how do you envision Nigeria’s asset management industry evolving over the next five years, and what specific capabilities is Sycamore developing today to meet those future market needs?

I envision five major shifts in Nigeria’s asset management landscape over the next five years. First, we’ll see true democratisation of investment access, with technology eliminating traditional barriers that have excluded much of the population. Investment minimums will continue decreasing while user experiences will improve dramatically.

Second, personalisation will become the standard. Generic fund offerings will give way to individualised solutions that align precisely with each investor’s goals, risk tolerance, and values, enabled by advances in data analytics and artificial intelligence.

Third, alternative assets will become more accessible to retail investors. Real estate, private equity, and other previously exclusive asset classes will be fractionally available through innovative structures like REITs and other securitisation models.

Fourth, cross-border investing will grow significantly as Africans seek exposure to global markets for diversification and as diaspora investment flows increase.

Finally, sustainable and impact-focused investing will move from niche to mainstream as investors increasingly demand financial returns and positive social outcomes.

Sycamore is developing capabilities to lead in each of these areas. Our multi-currency infrastructure already facilitates cross-border investing. We’re creating structures to democratise access to alternative assets. Our technology platform is designed for continuous innovation, allowing us to adapt rapidly to emerging trends.

By combining institutional-grade investment expertise with cutting-edge technology and a customer-first approach, we’re positioning Sycamore to shape the future of asset management in Nigeria rather than merely responding to it.