Centum Investment: East Africa’s Leading and Largest Investment Company

About Centum

Centum is East Africa’s leading and largest publicly listed investment company, listed on the Nairobi Securities Exchange and Uganda Securities Exchange.

The company acts as a channel linking global capital to inaccessible, quality, diversified investments of scale in Africa in 8 key sectors of focus that make up its Centum 3.0 strategy. These are Real Estate, Power, FMCG, Financial Services, Agribusiness, Healthcare, Education and ICT.

History

1967 – Incorporated as an affiliate of the Kenyan government-owned Industrial and Commercial Development Corporation (ICDC) with a seed capital of USD 26,000 and named Industrial Commercial Development Corporation Investment (ICDCI). In the same year, it was listed on the then Nairobi Stock Exchange.

1998 – ICDCI adopted an independent management team, with ICDC ceding day-to-day management and decreasing its shareholding. This was the first step into the formulation of the company that was to become Centum.

2008 – Name changed from ICDCI to Centum Investment Company Limited (Centum).

2009 – Centum embarked on an aggressive 5 year Pan African strategy that saw the company re-organised into three distinct business lines; Private Equity (PE), Quoted Private Equity (QPE) and Real Estate and Infrastructure (RE&I).

2012 – The company repositioned itself to better manage third party funds as well as for growth by reorienting the three business lines to become wholly owned subsidiaries of the parent company Centum.

2013 – Nabo Capital (formerly Centum Asset Managers) – one of the wholly owned subsidiaries – acquired approval from the Capital Markets Authority (CMA) to manage third party funds. In addition, Genesis Kenya – with KES 116 Billion of assets under management – joined the Centum family as part of our drive to grow third party fund management.

2014 – Centum meets the 2009 – 14 targets and launches a new strategy which sees it develop, scale and grow investment capabilities in 8 new sectors: agriculture, education, healthcare, energy, financial services, FMCGs, ICT and real estate.

Mission

To create real tangible wealth by providing the channel through which investors access and build extraordinary enterprises in Africa.

Vision

To be Africa’s foremost investment channel.

Our Values

• We deliver to promise
• We have unity of purpose
• We are partners
• We invest responsibly

Our Strategic Objectives 2014 – 2019

• To build a track record of project development in targeted sectors
• To grow total assets under management from USD 1.5 Billion (including 3rd party funds) to USD 8 Billion by 2019
• To generate 35%+ annualised return
• To develop, scale and grow investment capabilities in 8 new sectors: agriculture, education, healthcare, energy, financial services, FMCGs, ICT & real estate
• To maintain costs below 2.0% of total assets

Competition is fierce in the kingdom with its 30 million plus, mostly tech-savvy citizens. The company has approached the market with joint ventures, resellers and retailers to present their products, all the while focusing on their strategy to control prices, enhance their margins and specify their target and volume.

Sectors of Focus

In the strategic period 2014-19 dubbed Centum 3.0, we have made significant transition from being passive portfolio managers to active developers of investment grade opportunities. We are concentrating on 8 key and diverse sectors of the economy to create attractive opportunities for other investors to scale up on. These are:

Real Estate

Our strategy in real estate is hinged on the development of new urban nodes where we identify ideal Greenfield sites and drive the end to end process to develop real estate solutions that address compelling market needs. Our projects portfolio as managed by our subsidiary Athena Properties Ltd stands at includes:

1. Two Rivers Development a master planned urban node that sits on 102 acres in the Diplomatic Blue Zone of Nairobi, Kenya with a vision to be Africa’s pre-eminent destination. Phase one of its mixed use design currently hosts ongoing works for Two Rivers Mall on circa 66,000 sqm and a 3 star hotel by City Lodge; with a 5 star hotel, residential apartments and healthcare amenities to follow suit. The mall, being the largest in Sub Saharan Africa (outside of South Africa), is set to change the face of retail, entertainment and lifestyle as it introduces to the region flagship stores like Carrefour and Magic Planet as well as one of a kind aqua play facilities.

2. Pearl Marina on 389 acres is designed as an integrated waterfront resort town strategically positioned on the Garuga Peninsula enjoying over 3km of Lake Victoria frontage. It o become Uganda’s location of choice for premium tourism, business and residential amenities. It will feature amenities like hotels, luxury villas and apartments, marinas, a hospital, international school, office park, retail center as well as a wide range of sports and recreational activities. Its strategic location on the Garuga Peninsula enjoys with Phase 1A underway with a show cluster of 8 villas infrastructure of phase 1A will be complete later this year.

3. Vipingo Estates Limited

Financial Services

Our interests in the sector range from asset management to banking, and microfinance. Our financial services portfolio comprises:

1. Nabo Capital Limited, a wholly owned Centum subsidiary in asset management whose business revolves around the management of traditional asset classes such as equities, money markets and fixed-income portfolios as well as alternative asset classes such as real estate, securitizations and private instruments.

2. GenAfrica Investment Management Limited, who provide specialist investment management services to institutional clients within and outside Kenya.

3. Sidian Bank Limited (formerly K-rep Bank) a medium-sized bank serving microfinance customers, retail clients as well as financing small to medium-size business enterprises. Its latest innovative solution has been a breakthrough partnership with Uber to offer a KES 10Bn loan facility to Uber drivers.

4. Platinum Credit Limited, a micro finance company that provides emergency loans to its customers.

5. Zohari Leasing Limited, an operating and finance lease company serving the SME and corporate segments. At Zohari Leasing, we tailor our comprehensive range of asset leasing solutions to match your company’s aspirations and cash flows.

Power

Centum has a clear vision to be East Africa’s leading Independent Power Producer (IPP). Consequently, over the recent past, we have positioned ourselves as a leading developer and sponsor of Power Assets in the East African region, having locked in a development pipeline of approximately 1,200MW which includes:

1. Greenfield Coal Power Plant – Amu Power Limited:

Amu Power Limited is a Centum Investment-Gulf Energy consortium whose vision is to anchor long term national economic growth and aspirations by provision of reliable, safe and affordable power. The consortium on 1st September 2014 was awarded a tender by Kenyan Government for the development of a 1,050MW coal fired power plant, located in Lamu County. The plant will be the lowest cost producing IPP and will therefore form an integral part of the country’s base load power generating capacity and is estimated to cost approximately USD 1.9 Billion. This project will be the largest private sector funded infrastructure development in the East Africa region and the largest coal power plant development in East and Central Africa. Once complete, the plant will be the single largest IPP in Kenya and will account for 32% of Kenya’s generating capacity measured by today’s current installed grid capacity. Amu’s sustainability efforts will include a strong focus on community partnership, respect for the environment and transforming lives. Toward this, it has already distributed powered lamps to the community, street paving in Lamu town, building water storage tanks, distributing fishing equipment to local fishermen as supported the Lamu and Maulid Cultural Festivals.

2. Greenfield Geothermal Development – Akiira Geothermal Limited:

Akiira Geothermal Limited is the first private sector greenfield geothermal development in Sub-Saharan Africa. We have entered into partnership with the Danish Fund Frontier Investments, Ram energy and Marine Power Generation in a joint venture to develop the 140MW geothermal power plant. The Akiira block will be developed in phases beginning with 70 MW for phase I and drilling is begun in 2015. Phase II will produce an additional 70MW and on completion the plant will the largest privately owned greenfield geothermal development in SSA. Akiira’s geothermal prospect covers an area of 120 km² and is adjacent to the well-developed and proven Olkaria-Domes volcanic complex and high temperature geothermal field that is underlain by a large highly differentiated magma chamber which provides the heat source for the geothermal system. It has secured a multi-well exploration risk cover from German insurer, Munich Re, a USD 950,000 grant from US OPIC as part of President Obama’s Power Africa initiative and a USD 1,244,ooo Geothermal Risk Mitigation Facility from African Union Commission and European donors.

FMCG (fast-moving consumer goods)

Our focus on the FMCG sector is led primarily by our beverage portfolio companies including:

1. King Beverage Limited, a player in the alcoholic beverage industry that imports and distributes Carlsberg beer in the Kenyan market with a target to become a fully fledged brewer.

2. Kenya Wine Agencies Limited, a wine manufacturer, distiller, importer and distributor of alcoholic beverages.

3. Almasi Bottlers Limited and Nairobi Bottlers Limited, both bottlers and distributors of Coca-Cola products.

4. NAS Servair, an airport catering facility supplying over 30 International Airlines that fly into and out of Jomo Kenyatta International Airport (JKIA) in Nairobi and Moi International Airport (MIA) in Mombasa.

Agribusiness

Agribusiness is the mainstay of Kenya’s economy employing a majority of its workforce and contributing at least 25 percent of the country’s GDP. Despite this, the sector still performs below its potential due to underinvestment. We therefore seek to create investment grade opportunities in this sector.

We intend to leverage our resources to create Greenfield assets in the sector by de-risking opportunities and providing the foremost platform for investors looking to invest in the sector within East Africa.

In line with Centum 3.0, the pillars of our strategy in Agribusiness include:

• Integration: We want to tap into the entire value chain so as to capture a large proportion of the value of the end product
• Scale: We will focus on scalable opportunities that leverage our strengths
• Focus: Concentrate on opportunities where high value can be unlocked
• Market attractiveness: Capitalize on areas that will allow us to serve an under-served market
• Expertise: We will acquire and build expertise to streamline implementation of our strategy

Healthcare

There is range of investment opportunities in the healthcare industry that have the potential to deliver quality, affordable healthcare.

We intend to invest in both greenfield and existing healthcare assets. We will collaborate with repute technical partners to develop opportunities from an early stage, de-risking the asset to realize a significant value uplift. Kenya will provide an ideal platform for healthcare expansion into the rest of East Africa.

Our focus is on tertiary hospitals, outpatient centres and pharmacies.

Education

A young growing population coupled with increasing urbanization are driving the growth of K12 education in Africa. More than a billion people live in Africa, with 40% being younger than 15 years. Education is a crucial component in regional development as it democratizes access to economic opportunities and speeds up the pace of growth. We joined forces with partners who are passionate about educating children for this reason.

On 1st July 2015, Centum, SABIS Holdings and Investbridge Capital signed a Memorandum of Understanding opening the way for construction of twenty K12 schools throughout the African continent. The Cost of each school is estimated to be between USD 20 million to USD 30 million. The aim is to provide affordable, world class education to the African market. The consortium intends to build its first school in Kenya before expanding to Uganda, Tanzania, Egypt then other viable African Markets.

SABIS has more than 100 years’ experience in providing first world education and serves more than 70,000 students across four continents. The company has a track record of outstanding academic performance globally. Investbridge is an asset manager and advisory firm with a specialty in real estate and financing in the MENA region.

ICT (information and communication technologies)

ICT has been an important aspect of East Africa’s economic growth over the last 15 years. In the year 2000, East Africa (Kenya, Uganda and Tanzania) had approximately 250,000 internet users, and by the end of 2014 the region had more than 29 million. Kenya’s ICT sector is set to contribute up to 8 per cent to the country’s GDP through IT-enabled services (ITES) and create 180,000 jobs by 2017.

Major factors that will drive revenues in the sector will include strong population growth, development of ICT infrastructure by the public sector, and increasing data penetration. We see a strong opportunity to create assets of scale with forecasts showing the sector attracting up to USD 500 M to catalyze its growth and development.