Inside AMG: A money-making machine like no other

HARARE - In the heart of Sandton - a vibrant, high energy commercial centre in Johannesburg - is a premier business centre minting top dollar.

The mansions here, with their long, gated driveways and million-dollar views, are part of a hamlet called African Medallion Group (AMG).

Locals have another name for these moneyed lanes: "new money."

That's because the area is the wealthiest business district in the whole of Africa, and houses AMG - an African initiative  raising awareness on wealth creation and wealth inclusion of fellow Africans - based on 8 Maude Street in Sandton.

Apart from AMG's Zimbabwean founder Frank Buyanga, who focuses on philanthropic causes, relatively little has been known about this small group of entrepreneurs and bullion banking mechanics.

They are the creators and overseers of the AMG — perhaps Africa's greatest bullion money-making machine. They develop and distribute precious metal - mostly gold and related products such as medallions and krugerrands. AMG recently released a VISA card offering - making it possible for millions of unbanked individuals to securely keep their hard earned money.

They are developing a clientele with deep-rooted connections to the firm.

Since its inception in 2017, AMG - known for its intense innovation - has produced millions in profit, according to data compiled by Bloomberg, making it more profitable than funds run by billionaires.

It has become a multi billion Rand gold management firm that assists both individuals and corporate entities to setup their gold portfolios in order to preserve their wealth.

It has produced and sold hundreds of medallions within this short period of time. This included the sale of Pan African 1/4 Oz Fine Gold Medallion released last April, which sold out in record time . The start-up has continued to break records and set new standards of excellence since then.

What's more, it did so in a shorter time and with fewer assets under management. AMG almost never loses money.

Over the past year, its gold reserves spiked to R6 billion, hitting a historic high for the firm.

"They are the pinnacle of quant investing. No one else is even close," said an investment analyst.

Few firms are the subject of so much fascination, rumour, or speculation. Everyone has heard of AMG; almost no one knows what goes on inside. Besides the medallions and krugerrands, the company also operates the African Medallion VISA Card powered by First National Bank of South Africa (FNB).

This product gives the opportunity for all unbanked individuals to safeguard their money. The card gives competitive banking privileges.

Some of the benefits include the ability to withdraw money at ATMs, making purchases at stores and checking balance at an ATM, to mention a few.

Apart from the maverick businessman, relatively little has been known about this small group of investors — whose vast wealth is greater than the gross domestic product of many countries and is well-connected to big politics in many countries.

In an recent interview with the Daily News, the AMG founder, the deeply spiritual 39-year-old, said: "I am a steward of the Lord. All I control belongs to God that’s why there is so much of it.  All things I do are spirit-led and I get all my instruction from the Lord.  Money is a by-product of God’s creation therefore to make money or the making of it is simply by choice rather my main focus is to make the world a better place for all its inhabitants."

AMG is unique, even among hedge funds, for the genius — and eccentricities — of its people.

Last year, AMG closed a Rand 100 million acquisition of Pagliari Group, a former subsidiary of Rand Refinery and supplier of high-quality gold products.

The South African-based company has also offered its assets to capitalise Zimbabwe’s sovereign wealth fund (SWF) and its gold reserves have raced to R3,5 billion at the back of heightened demand for its minted products.

In December, AMG offered to acquire products such as fuel, cooking oil, cement and pharmaceuticals through an infrastructure bond for the skint Zimbabwean government. AMG said its offer was in a bid to be responsible corporate citizens, and the company found it necessary to contribute to alleviating the economic crisis in Zimbabwe.

The government is curiously still sitting on the offer.

For outsiders, the mystery of mysteries is how AMG has managed to pump out such huge annualised returns before fees.

Competitors have identified some likely reasons for the firm's success, though. AMG has probably found more signals on which to base their predictions and have better models for allocating capital.

They also pay close attention to the cost of trades and to how their own trading moves the markets.

AMG's success, of course, ultimately lies with the people who built, improved upon, and maintain medallion's models. This is their story. 

Starting as a driver for a cab company in 1999 at Cameo Cars based at the famous Waterloo Station in the UK and later as a bartender at Faunn Firkin in Leicester square, initially he bought and sold commodities, making his bets based on fundamentals such as supply and demand. He supplied goods and services to government departments, private institutions and individuals.

Today, his AMG offers world-class gold krugerrand - which is a South African gold bullion coin. The name itself is a compound of Kruger - the former South African president depicted on the obverse, and Rand – which is the South African unit of currency.

At AMG, various teams are responsible for specific areas of research, but in practice everybody can work on everything. They meet regularly to hash out ideas.

Buyanga is the benevolent father figure. No other AMG senior executive has possessed his people skills, those who know him and the company say, and he inspired the team to stick together.

He makes sure AMG produces healthy annual returns, after fees.

AMG's investment has paid off. Today the group accounts for the majority of medallions profits.

Thanks to medallion, the AMG boss has a healthy net worth.

In some ways, money, not unlike the company's imposing dominance, even binds the place together. With the exception of the staff who depart for academia, folks don't leave AMG. Why would they? The profits are huge, the colleagues first-rate, and the pay cheques huge.


 

Comments (3)

Mr Editor... I used to work for your paper and even I, your sentimental ex - journalist, find this style of "bought and paid for" journalism acutely embarrassing. Why not just have Mr Buyanga buy space in your paper and call this what it is , an advert ? Besides the obvious agenda of this piece, it is rife with grammatical errors and non-sequiters. Please be better Daily News !

truthsaid - 15 January 2019

Only believe Comrade Buyanga with these wonderful stories if and when you see his company's balance sheet and accounts. He has learnt his trade at the foot of Nic Van Hoogstraten

ace mukadota - 15 January 2019

The president is off to Russia and other dodgy communist states looking for dole....why cant he give him - 'just $1Bn will do Buyanga'.

OK - 15 January 2019

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