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MIND SPEAK

MIND SPEAK. PRESENTATION BY JAMES MWORIA. Agenda. Background Centum Investment Planning. Background. Career Progression. 2001 – ICDCI intern 2001 – ICDCI Management Accountant 2004 – ICDCI Head of Investments 2007 – TCL Head of Investments 2008- Centum CEO. Centum. Our core business.

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MIND SPEAK

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  1. MIND SPEAK PRESENTATION BY JAMES MWORIA

  2. Agenda • Background • Centum • Investment Planning

  3. Background

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

  5. Centum

  6. 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

  7. Our Portfolio

  8. Our Portfolio & more recently 23% of Carbacid

  9. Centum Corporate Performance Vs NSE Index

  10. 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

  11. Opportunities • 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

  12. 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

  13. 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

  14. Strategy Highlights • We will focus on making investments in the following asset classes across Africa: • Private equity: take controlling and minority investment opportunities in unlisted companies • Quoted Private Equity: take influential positions in listed companies and employ private equity techniques to create value • Real Estate: build a diversified portfolio of real estate investments

  15. What we invest in

  16. Investment Planning

  17. Investment Planning Process • Planning • Execution • Feedback

  18. 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

  19. 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?

  20. 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

  21. Mary’s Wealth Accumulation

  22. 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

  23. 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

  24. Many thanks & Q&A

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