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MIND SPEAK PRESENTATION BY JAMES MWORIA 1. Agenda 2 1. Background 2. Centum 3. Investment Planning.

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Presentation on theme: "MIND SPEAK PRESENTATION BY JAMES MWORIA 1. Agenda 2 1. Background 2. Centum 3. Investment Planning."— Presentation transcript:


2 Agenda 2 1. Background 2. Centum 3. Investment Planning

3 Background 3

4 Career Progression 4  2001 – ICDCI intern  2001 – ICDCI Management Accountant  2004 – ICDCI Head of Investments  2007 – TCL Head of Investments  2008- Centum CEO

5 Centum 5

6  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 core business

7 Our Portfolio % of total portfolio% Stake Financials44.3% Aon Minet Insurance Brokers5%21.50% UAP Holdings14% 24.23% K-Rep Bank0.3%3.78% Kenya Commercial Bank 25%3.58% Beverages24% KWAL2%26.43% Mount Kenya Bottlers4%28.62% Nairobi Bottlers6%27.62% Rift Valley Bottlers4% 44.03% Kisii Bottlers3% 23.87% EABL 6%0.45%

8 Our Portfolio % of total portfolio% Stake Publishing-Longhorn4% 35% Automotive-GMEA16%17.82% Services4% NAS Airport Services2%9.13% Safaricom Limited 2%0.10% Infrastructure0% Rift Valley Railways (Pty)0%10% Others 4%<1.00% & more recently 23% of Carbacid

9 Centum Corporate Performance Vs NSE Index Annual Percentage Change Year 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%

10  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 Current Situation

11  More attractive buying environment with more reasonable valuations  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 Opportunities

12  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 Competitive Position

13 Investment Approach 13  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

14  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 Strategy Highlights

15 What we invest in Asset ClassApproach 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

16 Investment Planning 16

17 Investment Planning Process 17 1. Planning 2. Execution 3. Feedback

18 Case Study 18  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

19 Problem? 19  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?

20 Mary’s Investment Plan 20  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

21 Mary’s Wealth Accumulation 21

22 Results of Investment Program 22  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

23 Myths about Successful Personal Investing 23  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

24 Many thanks & Q&A 24

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