In an exclusive interview with Segun Adebayo, Mr. Babatope Davies, Executive Director and Group Chief Operating Officer at Wealthbridge Financial Services Limited, details how he has leveraged his extensive professional experience across various roles in the financial services industry in discussing the need to localize sustainable finance for better implementation.
Welcome Mr. Davies, You have been a significant player in the finance sector with extensive experience in financial advisory and investment banking across various sectors including project finance, real estate finance, mergers & acquisitions and international funding. Can you summarise your transition from early career to your recent appointment as Executive Director?
Certainly. I started my early career with a stint in audit and advisory with a notable accounting firm and frankly, I began to hone financial modelling skills at that stage. I later pivoted into core investment banking working with a subsidiary of a leading bank in Nigeria advising on equity capital raising transactions like public offers, right issues and private placements for key clients. I later joined a different leading investment banking firm where my role was expanded. This time not only leading teams advising clients on public offers, right issues and private placements but delving more into project and structured finance. I started advising on investment opportunities, valuations and capital raising. I recall being part of the team that pioneered the International Funding and Local DFI Department that drove funding initiatives for the bank while joggling my role with the Proprietary Investment Desk of the bank. I have had the privilege of advising and structuring funding transactions for various projects in diverse industries. My more recent experience include serving as Vice President within the real estate team at an international banking group and I must say the experience of structuring finance specifically for real estate has been worth the while. These experiences have been what have culminated into my recent appointment.
You also have experience in international funding and proprietary investments. Can you elaborate on your experience in that area?
Yes, I remember it like yesterday. I served as an Assistant Manager in International Funding & Local DFIs and the Proprietary Investments Desk of a notable bank. An interesting highlight was leading the team responsible for documentation and financial close of a $100 million facility granted by the then US Overseas Private Investment Corporation (now the US International Development Finance Corporation). I also managed the bank’s portfolio of investments, ensuring prompt performance and making recommendations on investments and divestments across various investments including state government bonds, corporate bonds, Eurobonds and stock warrants. These roles required a deep understanding of international funding mechanisms and investment strategies.
Your experience in real estate finance is impressive. Can you tell us more about your time in that space?
In my role at the international banking group, I led teams that arranged various financing facilities for real estate development including USD88 million green loans for a international real estate fund and a USD40 million refinancing facility for a portfolio of commercial real estate assets for one client which was another real estate fund focused on Sub-Saharan Africa among other ground breaking transactions. My role involved deal origination, managing customer engagements from pitching stage to deal completion as well as coordinating due diligence and transaction documentation. Few of my highlights has been supporting on a multi-jurisdictional cross-collateralized facility, which won the award for EMEA Best Restructuring Transaction in Africa for 2022, arranging a refinancing facility for a leading private equity fund in Africa and arranging facility for Nigerian real estate companies to support residential real estate development in Lagos. These projects required meticulous planning, negotiation, and execution to meet our clients’ objectives.
Your career spans various sectors and roles. One significant area that cuts across global financing is the aspect of sustainable finance. Would you say there is any need for sustainable finance in indigenous nations?
Sustainable finance is a global issue and is now a common theme across key players in the finance sector. It is a global phenomenon not restricted to any particular geographical location. The need for sustainability is beyond debate and is now accepted as the right way to go. It’s about making decisions that reflect due considerations for the Environmental, Social and Governance (ESG) components in a manner that ensures the best interests of parties that may be impacted by those decisions. Although it has been more of a voluntary practice over time, sustainability reporting has become a necessity. Regulatory bodies such as the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC) and in fact the National Code of Corporate Governance (NCCG) have addressed the importance of sustainability reporting in different Guidelines.
To what extent have these sustainability reporting solutions been effective in Nigeria?
Sustainability reporting has really helped globally to focus companies’ and investors’ attention to this important topic and a lot of parties are taking responsibility. However, from a global perspective, one would expect more to be done to drive the sustainability message and culture especially as the world is still experiencing degradation in climatic conditions and the other social challenges including poverty eradication are far from being over in most countries. It is certainly work in progress and regulatory bodies have given their nods by setting guidelines for sustainability reporting. A key challenge that comes to mind will be on ensuring that the focus on reporting and disclosures does not create the incentive for participants to frame reports to suit narratives without taking the desired actions that a focus on sustainability would otherwise have predicted. While the impact of the third party reviews and audits on sustainability must be acknowledged, this incentive remains lending credence to the thinking that requiring disclosures cannot alone by itself win the war for sustainability.
Should sustainability reporting be limited to bigger firms or should SMEs also report?
In most sectors, the larger companies appear to be at the fore-front on sustainability. This may be because they were first to develop models to assess their impact on their physical and social environments and as such have the facilities to better report their respective journeys much in the same way that more advanced nations seem to have led the charge for environmental sustainability. The weight of sustainability should however not be solely on bigger firms as sustainability is everyone’s business and is a critical factor now considered by investors globally. SMEs are encouraged to consider ESG components in their affairs. This can improve their brand image, open the business up to new markets, avail them better financing options as well as give them competitive edge.
What challenge do you envisage with sustainability reporting and financing in Nigeria
ESG is a global issue and just like any other global idea, the implementation must fit into the socio – cultural milieu of indigenous communities to improve its effectiveness. ESG components for each country or people will be different from time to time as investments in improving social welfare for some people today can help them adopt more environmentally friendly practices in the future. In the end, ESG is unrepentantly local as everyone has the responsibility to be environmentally responsible and to adopt sustainable practices.
In terms of your career, what are some of the biggest challenges you’ve encountered?
One of the biggest challenges has been navigating the complexities of cross-border transactions, especially in regions with varying regulatory environments. Ensuring compliance while meeting clients’ needs requires a deep understanding of local and international regulations. Another challenge is managing stakeholder expectations and aligning them with project goals. This often involves extensive negotiation and strategic planning to ensure all parties are satisfied with the outcomes.
Finally, what advice would you give to aspiring finance professionals?
My advice would be to continuously seek knowledge and stay updated with industry trends. The finance sector is dynamic, and staying ahead requires a commitment to learning and professional development. Additionally, building strong analytical and strategic thinking skills is crucial. Networking and building relationships within the industry can also open doors to new opportunities and collaborations. Lastly, always maintain integrity and professionalism in all your dealings, as these qualities are essential for long-term success.
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