MIND SPEAK
PRESENTATION BY JAMES MWORIA
1
Agenda
1.
Background
2.
Centum
3.
Investment Planning
2
Background
3
Career Progression
2001 – ICDCI intern
2001 – ICDCI Management Accountant
2004 – ICDCI Head of Investments
2007 – TCL Head of Investments
2008- Centum CEO
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4
Centum
5
Our core business

Centum is the investment channel that provides investors access to
a diversified portfolio of unquoted and quoted investments

Our focus is on making investments in private equity (62%), public
equity (35%) and real estate

Our vision is to become “Africa’s foremost Investment Channel.”

Our mission is to create real, tangible wealth by providing the
channel through which investors access and build extraordinary
enterprises in Africa
Our Portfolio
% of total
portfolio
Financials
Aon Minet Insurance Brokers
UAP Holdings
K-Rep Bank
Kenya Commercial Bank
Beverages
KWAL
Mount Kenya Bottlers
Nairobi Bottlers
44.3%
5%
14%
0.3%
25%
24%
2%
4%
6%
Rift Valley Bottlers
4%
Kisii Bottlers
3%
6%
EABL
% Stake
21.50%
24.23%
3.78%
3.58%
26.43%
28.62%
27.62%
44.03%
23.87%
0.45%
Our Portfolio
% of total
portfolio
% Stake
Publishing-Longhorn
4%
35%
Automotive-GMEA
16%
17.82%
Services
4%
NAS Airport Services
2%
2%
9.13%
0.10%
0%
0%
4%
10%
<1.00%
Safaricom Limited
Infrastructure
Rift Valley Railways (Pty)
Others
& more recently 23% of Carbacid
Centum Corporate Performance Vs NSE
Index
Annual Percentage Change
Per Share Book
Value of Centum
NSE Index
with
Dividends
included
Relative
Performance
2009
-24%
-40%
16%
2008
-3%
-5%
1%
2007
35%
21%
14%
2006
32%
8%
24%
2005
57%
49%
8%
Year
Current Situation

Market valuations across most asset classes have come down
significantly

Market sentiment is very low and this has reduced investor appetite

Risk aversion has increased and this has resulted in increased equity
risk premium and higher emerging market risk premiums hence
reducing pricing

Many emerging market private equity funds and hedge funds are
scaling back
Opportunities

More attractive
valuations
buying
environment
with
more
reasonable

Reduced competition from other investors

Increasing equity investment opportunities as alternative funding
options become tighter

Reduced appetite for debt has created demand for equity
investment among companies
Competitive Position

Permanent capital vehicle with a strong financial position, low
leverage and high stable cash flows

Our portfolio companies are market leaders in their sectors with
very strong competitive advantage, this positions them to fare well
even in a down turn

Flexibility to invest in illiquid assets and outside Kenya

A solid track record in making and managing private equity
investments
Investment Approach

Aim to deliver consistent market beating returns

Invest in companies with a track record that solve basic needs or that
displace sub-optimal solutions in markets that we understand

sub-Sahara Africa represents the largest region of untapped demand in the
world
13
Strategy Highlights

We will focus on making investments in the following asset classes
across Africa:
1.
Private equity: take controlling and minority investment
opportunities in unlisted companies
2.
Quoted Private Equity: take influential positions in listed
companies and employ private equity techniques to create
value
3.
Real Estate: build a diversified portfolio of real estate
investments
What we invest in
Asset Class
Approach
Private Equity
• Make investments of between Kshs 160 – 800 mm per
investment to acquire either a controlling or minority
equity position
Quoted Private Equity
•
Acquire influential stakes in quoted companies and
employ private equity techniques to create value
Real Estate
•
Make real estate investments with a cash flow stream
or where one is imminent within 18 months
Investment Planning
16
Investment Planning Process
1.
Planning
2.
Execution
3.
Feedback
17
Case Study

Mary is a 30 year old marketing executive in a large multinational
FMCG company

Her current monthly take home pay is Kshs 130,000

She expects 5% salary increase every year

She plans to retire with her husband John in Lamu at age 55

She wants to be able to earn Kshs 500,000 a month in passive
income for the rest of her life once she retires. She also hopes to
still leave behind a sizable inheritance upon her death

She is able to save Kshs 30,000 per month increasing by 5% every
year
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Problem?

Is Kshs 500,000 a month a realistic return objective?

Is Mary’s salary consistent with her dreams?

Should she move to a better paying job?

What sort of return must she aim for?

Should she agitate for an extension of the retirement age?
19
Mary’s Investment Plan

Mary decides to Invest Kshs 360,000 annually increasing
at 5% per annum

Mary is a very conservative person and against the advice
of her husband John she invests in what he considers very
low return assets yielding 12% a year

John is very skeptical that Mary’s savings will amount to
much and he does not shy from telling her so
20
Mary’s Wealth Accumulation
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Results of Investment Program

Upon retirement Mary has a portfolio worth Kshs 78m

She will have invested a total of Kshs 17 m

Her portfolio will generate a passive return of Kshs
780,000 upon retirement

Mary will be able to spend more and still save more
in retirement than she did while employed
22
Myths about Successful Personal Investing

You need to be making a lot of money

You need to have special knowledge

You need to invest in very high return assets

You need to work for a long time
23
Many thanks & Q&A
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