Centum is the leading and largest quoted investment company in East and Central Africa with over 38,000 shareholders and it has been listed on the Nairobi Stock Exchange since 1967. Being both a provider and manager of funds, the company positions itself as an investment channel through which other investors are able to access diversified investments and management expertise for a superior return.
Its portfolio is currently valued in excess of US $ 140 million and consists broadly of investments in private equity, listed equity and real estate. The private equity portfolio is the largest asset class, with notable investments in the Financial and beverage sectors. Its vision is to be Africa’s foremost investment channel, while its mission is to create real and tangible wealth by providing the channel through which investors access and build extraordinary enterprises in Africa.
Prime Assets
With a basket of profitable private equity investments and a remarkably consistent record of building shareholder wealth, Centum Investment Company appears intent on becoming the Berkshire Hathaway of Kenya.
Centum’s investment portfolio is concentrated in four of East Africa’s most promising sectors: real estate (22%), consumer goods (22%), financial services (17%), and energy (5%). Notable holdings include controlling stakes in fast-growing K-Rep Bank, four of Kenya’s six Coca-Cola bottlers, a pipeline of power projects with a combined 1120MW of generating capacity, and an 18% stake in General Motors’ East African subsidiary.
Perhaps the most exciting of all of these assets, however, is its stake in Nairobi’s Two Rivers Mall. The first phase of this massive, $240 million integrated real estate development is nearly complete. And when it opens its doors next month, it will become sub-Saharan Africa’s largest mall outside of South Africa, with international brands, two hotels, and high-end residential and office space.
Top-Notch Management
The company’s daily operations are overseen by youthful CEO James Mworia. A lawyer and accountant by training, Mworia began his investment career as a Centum intern in 2001. His deal-making skills and knack for spotting value caught the attention of the late Chris Kirubi, who appointed him Centum’s CEO at the ripe old age of 31.
He took the reins in the wake of post-election violence in 2008. Kenya was in the midst of 26% inflation, a stalled economy, and a bear market that saw stock prices drop 40% in the space of a year.
Recognizing a fine opportunity to pick up blue chip assets on the cheap, Mworia opted to stop paying dividends and allocate all available assets to building and diversifying the firm’s holdings.
The bold move paid off. Centum’s net asset value has grown at an annualized rate of 33% during Mworia’s six years at the helm.
This growth, in tandem with innovative capital raising strategies, has helped the company to quadruple its asset base over the past five years without coming back to the market via a dilutive rights issue.
What’s more, in spite of Centum’s rapidly increasing scale, management has done an admirable job of keeping costs in check. The company runs very lean with a small staff. Total costs as a percentage of total assets has remained comfortably below 2.5% in each of the past six fiscal years.
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