May 13, 2013… David Owino, the Director of Private Equity at Centum Investment Company Limited was among those feted was in the just concluded Top 40 under 40 national survey. 

Centum is the largest listed investment company in east and central Africa with over KES 20B in assets under management. Our business involves sourcing for capital, investing this capital and managing investment portfolios for superior returns.

Critical to Centum’s business is ensuring that financial and operational controls are existent, adequate and complied with.

We invite proposals to provide specialist internal audit in each of the following areas:

1.    Investing and Portfolio Management

-    Review adequacy and compliance of processes and policies around fund raising, opportunity sourcing, investment appraisal, portfolio management, project management and customer service for:

§  Real estate business line

§  Private Equity business line

§  Quoted investing business line

2.    Corporate structure and governance

-    Review adequacy of the corporate structure alongside business strategy.

-    Review adequacy of governance structures and policies at group and subsidiary levels.

-    Review business preparedness and resilience to external shocks.

-    Review legal and regulatory compliance.

3.    Tax

-    Review tax compliance

-    Review adequacy and compliance of the transfer pricing policy

4.    Finance and operations

-    Review adequacy of procurement policies and compliance to the same.

-    Review controls around treasury management operations and safeguards on non-investment company assets.

-    Review controls around recording and updating of accounting and financial information.

-    Review controls around cash handling.

5.    Brand management

-    Evaluate the status of the Centum Brand.

-    Review adequacy of policies in place to safeguard the Centum brand.

-    Review controls around corporate communication.

6.    HR

-    Review policies and procedures around HR management

-    Review adequacy of HR to support business strategy

-    Review adequacy of succession planning

-    Review the talent attraction and retention policies

-    Review staff motivation levels.

7.    ICT

-    Review ICT’s ability to support business strategy

-    Review use of ICT for corporate knowledge management and business intelligence

-    Review ICT governance

-    Review ICT Security

Firms may submit proposals in one or more than one specialist audit area. Different proposals will be required for each specialist area.

Each proposal should include:

1.    Your proposed audit methodology / approach

2.    Your experience in such assignments and referrals to whom you have undertaken similar assignments

3.    Profiles of the team members you propose to deploy in this assignment

4.    Your fee proposal

5.    Timelines within which you expect to finalise this assignment.

Initial evaluation will be made based on the following criteria:

Shortlisted firms will be invited to present their proposal after which a final evaluation will be made based on demonstrated ability to meet our needs and the fee proposal.

Please inform us of your intention to submit your proposal by Tuesday, 2^nd April 2013. The proposal submission deadline isFriday, 5^th April 2013.

Kindly contact our Teresia Muthoni ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it / This e-mail address is being protected from spambots. You need JavaScript enabled to view it '; document.write( '' ); document.write( addy_text79116 ); document.write( '<\/a>' ); //--> This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) for your confirmation and in case you require any clarification.

Remarks To The East African Society Of Investment Professionals Charter Award Ceremony

The Hilton Nairobi

February 28, 2013

JAMES MWORIA, CFA

……………………………………………………………………………………………………….

Dear East African Society of Investment Professional Members,

CFA Charter-holders;

CFA students;

Friends of the profession;

Ladies and Gentlemen.

It is a unique honor and privilege for me to be invited this evening for this very important occasion.

I would like to begin by congratulating all those who have earned the CFA Charter.  The process leading to the award of the CFA Charter is as many of you know a painstaking one and is a journey that very few complete.  The difficulty of this endeavor is perhaps best illustrated by an ad that the CFA Institute ran a few years back in the FT. The Ad had the names of all the newly qualified CFA Charter Holders that year printed in times new roman size 6 font with the words, “ the only thing more difficult than reading all the names on this page is getting on this page”.   This is a truly arduous endeavor that calls for dedication, commitment and a significant investment and I would like to congratulate the 13 CFA Charter- holders who shall be receiving their Charters this evening.

This is the highest number of individuals to have earned the CFA Charter in any one year and it came to me as an extremely pleasant surprise.   When we introduced the CFA Program at Strathmore University in 2003 there were only a handful of Charter-holders in this country at the time.  Of the students in that pioneer class, I can see in the room today: Fahima Zein, Steve Wamathai and of course Eleanor Kigen all of whom have played a significant role in promoting the CFA program both as lecturers, mentors and leaders of the East African Society of Investment Professionals. I request that we given them a round of applause.

My dear candidates and members.  I would like to pose a few questions.

1.    What does it mean to be a CFA Charter Holder?

2.    What are our obligations as CFA Charter Holders?

3.    What is expected of us as Charter Holders and candidates?

In my view, the recently approved mission statement of the CFA institute very eloquently addresses these pertinent questions.  The mission statement of the institute is, “to lead the investment profession globally by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society.”

Attaining the CFA Charter is not just about career progression. It is not just about a higher salary. It cannot just be about a bigger bonus.  It is not about a better job.  There is something bigger and there is an expectation that you shall provide leadership by (i) promoting the highest standards of ethics, (ii) education and (iii) professional excellence for the ultimate benefit of society.

I would like to zero in on the words, “ the ultimate benefit of society.”  Societies differ, the needs of an American society differ significantly from the needs of an Indian or Chinese or European society. The society is local and as CFA Charter-holder in Africa you are challenged to employ your skills for the ultimate benefit of the society that you are a part of.

What are the issues facing our African society today?

They say that Africa is the last frontier- that is true

They say that Africa is the only continent with significant potential for outsized returns in the long term – that is true

They say that with the democratic gains made, Africa is set for take off- that is true.

The IMF has projected that during the next five years, 10 of the 20 fastest growing economies in the world will be in Sub-Saharan Africa and two will be in North Africa. None will be in the developed West. – It is true that they have said so.

McKinsey in their seminal report, “Lions on the move”, indicated that Africa has 10 per cent of worlds oil reserves, 40 per cent of its gold, 80-90 per cent of its chromium and platinum, 60 per cent of the worlds uncultivated arable land, and a 500 million strong work force only China and India have larger work forces. – that is an undeniable fact. 

Many good and great things have been said about Africa and Africa’s potential – all of which are true.

Ladies and Gentlemen, it is also true that between 1990 and 2008 Africa made the least progress in reducing poverty. The proportion of people living on less that US$ 1.25 a day in Africa declined by only 20 percent as compared to 40 per cent in South Asia and 75 per cent in East Asia and the Pacific. 

You all recall that in the recent Presidential debate much of the time was spent discussing land.  If economic performance and standard of life was correlated to the size of land holdings then Kenya would have a GDP 6x larger than Korea. Instead Korea’s GDP is larger than the entire Sub-Sahara Africa GDP inspite of the fact that only 30% of its land mass is arable.

You have all seen reports that speak of Africa’s young population and high fertility rates as a driver of growth. If economic performance and standard of life was a function of population then Kenya would have a GDP 9x larger than Singapore.  The reality is that Singapore with a population of just 5 million has a GDP that is 7x larger than Kenya.

You have also seen research reports that speak of Africa’s resources and her significant proportion of share of total resources. Few countries are as richly endowed with resources as South Africa. Yet how do you explain the fact that Italy, a country with no natural resources of significance has an economic output that is almost 6x South Africa.

Members and candidate you know or ought to know that CFA Standard of Professional Conduct number 5 that deals with investment analysis, recommendation and action imposes an obligation to have a reasonable and adequate basis, supported by appropriate research and investigation for any investment analysis, recommendation or action.

The research and investigations on the reasons for Africa’s underperformance and the relevant drivers of any future improvement in performance indicate that it shall not be driven by the size of our arable land or by Africa demographics or by her natural resources or by her growing capacity to consume-mobile phones, I-Pads, cars, etc. Indeed no country on the planet today is wealthy for any of these reasons.

So what is missing? What needs to bridge the gap between Africa’s current state and it alluring potential?   Why is it that Africa despite its promise and resources is home to the majority of poor people on the planet?  Why is it that Africa, which is home to 17 per cent of the world’s population, occupies 20 per cent of the world’s land mass contribute only 3 per cent to global output and less than 0.1 percent to annual global economic growth?

My diagnosis ladies and gentlemen is that Africa has a productivity problem.

My dear students of economics and finance you know that productivity is the efficiency in which resources are utilized to generate output. Productivity is what sets the standard of living (wages, returns on capital and returns on natural resources) that a nation can sustain. 

The World Economic Forum defines competitiveness as the set of institutions, policies and factors that determine the level of productivity of a country. Competitiveness is linked to productivity and productivity is the driver of economic growth.  Economic growth is the principal driver of enhancement of incomes, reduction of poverty and improvement of most aspects of human quality of life. 

Productivity is a function of the quality of a Country’s institutions.  Daron Acemoglu and James A. Robinson in their book, “Why Nations Fail, the origins of power, prosperity and poverty,” address the question, why are some nations prosperous and stable while others fail and are poor? The authors argue that countries differ in their economic success because of their different institutions, the rules influencing how the economy works, and the incentives that motivate people.  There are two types of political institutions, extractive and inclusive ones. It is the political process that determines the rules that people live under and it is political institutions that determine how this process works. Inclusive political institutions are broad based with a system of checks and balances that contain the exercise of power by any one individual or institution. Extractive political institutions concentrate power in the hands of a narrow elite with limited institutional checks and balances.  Inclusive political institutions support inclusive economic institutions that enforce property rights, create a level playing field and encourage investments in new technologies and skills.  Extractive political institutions are linked to extractive economic institutions that are structured to extract resources from the many by the few and they fail to protect property rights or provide incentives for economic activity.

Nations are poor today because their extractive economic institutions do not create the incentives needed for people to save, invest and innovate.  Extractive political institutions support these economic institutions by cementing the power of those who benefit from the extraction.

Who is responsible for the development of our institutions? 

Again a deep research and analyses of the country’s that made the transition from extractive economic institutions to inclusive ones indicates that it was that country’s population. No country has made a transition in the development of its institutions on the basis of foreign or imported support.  In England, the glorious revolution of 1689 that enshrined the Bill of Rights, significantly reduced the powers of the monarchy by transferring them to an elected parliament. It lead to the abolition of monopolies, reformed finance and heralded the dawn of industrial revolution. The glorious revolution was supported by the English merchant middle class.  Botswana achieved remarkable growth because of the inclusive political and economic institutions that were established after independence. Seretse Khama, Quett Masire and the Botswana Democratic Party led this transition onto a path of inclusive economic and political institutions. The stories of Botswana, England, and even China, the United States, Japan, South Korea and all those countries that have managed to make the transition from extractive institutions to inclusive institutions vividly illustrate that history is not destiny. They powerfully demonstrate that transition has to be driven by the locals of that country and that some generations have to sacrifice more so that subsequent generations may enjoy.

In Kenya the process of transforming our political institutions is well underway and the enactment of the new Constitution was a high point in developing institutions checks and balances to contain executive power.  Some have argued that by creating numerous constitutional bodies all charged with various responsibilities of checking various aspects of executive power we have created an inordinately expensive governance system.  It is true that the full implementation of the new constitution is expensive but the alternative, is significantly more expensive materially and in terms of human life.  It is interesting to note that at independence Kenya had a higher GDP that South Korea and the difference between the two countries was in the quality of their political institutions.  

Our colleagues in the legal and media professions have over the last 20 years played a key role in the transition of our political institutions to inclusive ones.  If this transformation is to have any meaningful impact on our society it is imperative that we transition our economic institutions as well.  That is squarely the responsibility of the ladies and gentlemen in this room.  I can see some of us looking at each other in disbelief.  Yes you! I would like to echo Margaret Franklin’s, passionate appeal: “if not us, who? If not now, when?” I would also like to remind you of Dante’s warning, that the hottest places in hell are reserved for those who in times of great crises maintain their neutrality.   Having achieved success in this life and risen to the exalted ranks of a Charter-holder or CFA candidate it would be a pity if you faced eternal damnation in the next life.  For there can be no greater crises than the one that our Society faces today.

Back to our mission, what can we as CFA Charter holders and candidates do to for the ultimate benefit of our society. I say, a lot.

First, we have a critical role to play in the strengthening of our economic institutions. The World Economic Forum Global Competitiveness Survey 2012, placed Kenya  in the bottom quartile on areas such as protection of minority shareholder interests, efficacy of corporate boards, strength of auditing standards and ethical behaviour of firms.

Second, we must tell the African story.  It is said that until lions have their historians, the story of the hunt will always glorify the hunter. People from outside the continent have mostly told Africa’s investment story.  The perspective of the rest of the world towards Africa over the last 500 years and more has been on what they can get out of this continent.  Today’s narrative has a familiar theme. The resources story is on the opportunities that exist to extract resources from Africa. The consumer and population demographic story is about the growing opportunity to sell finished consumer products and services to the African market. And the narrative goes on. Who shall tell the story of how African Companies can add value and export processed goods to Asia and China? Who shall tell the story of the opportunities that exist to extract resources in China for processing in Africa? The Lion does not fault the hunter for telling the story the way it is told. No foreign continent holds a brief for Africa and we should not fault the legitimate self interest of other nations. My dear colleagues we have a responsibility to tell our story, to attract capital and develop financial markets that shall be an engine of economic growth and that shall support jobs and communities within our society.

Third, we have a responsibility to educate. Who saw Jaindi Kisero’s editorial in yesterday’s Nation crying out at the scanty coverage of economic issues in the Presidential debate? What was our contribution as investment professionals in working with our brothers in the media to ensure that the issues addressed were relevant to the challenges that we face today.  Who shall educate Kenyan’s that unless we enhance our competitive environment and productivity, which is largely a function of leadership it does not matter how much natural resources we discover, it does not matter how much land we have, it does not matter how many children we bear our plight is unlikely to change.

Fourth, we have a responsibility to create African success stories within our continent.  Success is attractive and unless we can create value and returns for the domestic pools of capital that we manage we are unlikely to attract international pools of capital to focus on investing in Africa in the long term. Creating a critical mass of local African investors will provide foreign investors with a barometer of what to do.  We need to demonstrate that Africans are investing in Africa to be able to attract significant FDI flows outside the extractive sectors of our economy.

Fifth, we have a responsibility to leave our comfort zones and pursue and assume leadership positions.  As followers we have a responsibility to be good followers who hold our leaders accountable by engaging them on relevant issues.

Every generation has a challenge. Our challenge as investment professionals in this age is to build institutions that shall bridge an almost 200 year development gap between African and the rest of the World. We have a responsibility to lift the millions who continue to wallow in poverty out of their desperate situation.

To those whom much is given much is expected.  We have received much. We have offered little in return.  The drums of war are beating. My dear colleagues shall we let posterity find us wanting in courage. Shall we neglect our responsibility? Today there are 52 Charter-holders in East Africa. We have a critical mass.  Skeptics may argue that we are not enough.  My response to the skeptics and the naysayers is, “one man with courage makes a majority.”

Thank you ladies and gentlemen and may God bless you, God bless Kenya and the elections ahead of us.

The Speech of the Chairman of Centum Investment Board of Director, Mr. James Muguiyi during the Ceremony to Mark the Listing of the Kes 4.2BN Bond. Monday, February 20^th 2013

Mr. Eddy Njoroge, Chairman of the Nairobi Securities Exchange;

Mr. Kung’u Gatabaki, Chairman of the Capital Markets Authority;

The Members of the Board of the Nairobi Securities Exchange present;

The Members of the Board of Centum present

Mr. Peter Mwangi, Chief Executive of the Nairobi Securities Exchange;

Mr. Paul Muthaura, Ag. Chief Executive of the Capital Markets Authority;

Mr. James Mworia; Chief Executive of Centum Investment Company Limited;

Bond investors;

Bond transaction Advisors;

Management Team of Centum present;

Members of the Media;

Distinguished Guests;

Ladies and Gentlemen; On behalf of the Board of Centum Investment Company Limited, I am delighted to welcome you, to witness what is truly a historical occasion, the listing of Kes 4,167,900,000 of five year senior unsecured fixed rate notes and five year senior unsecured equity linked notes on the Fixed Investment Securities Market Segment of the Nairobi Securities Exchange.

Ladies and Gentlemen:  We set out to raise Kes. 4 Billion by way of an issuance of  Fixed Rate Notes and Equity Linked Notes (ELN) subject to a Green Shoe Option of Kes.1 Billion and I am proud to report that we successfully raised Kes. 4,167,900,000 split as follows; Kes 1,250,800,000 (30%) in equity linked notes and Kes 2,917,100,000 (70%) in fixed rate notes. 

Kes 3,167,900,000 was raised through private placement in September 2012 and Kes. 1,000,000,000 through public offer in December 2012.

The fixed rate notes shall earn a fixed interest of 13.5% per annum, while the equity linked notes will enjoy a fixed interest rate of 12.75% per annum both payable semi-annually. The equity linked notes will participate in the equity upside of the Company and the redemption value is linked to the growth of the Company’s Net Asset Value subject to a maximum of 15% of the par value of the notes. I am confident that investors in the equity linked notes will enjoy this upside in full.

Many aspects of this issue make it one of a kind in Kenya;

·         It was the largest private placement in the history of Kenya’s Capital Markets and is the fourth largest issue after Kengen and more recently Safaricom and Housing Finance.

·         It is also the only privately placed bond that has been later opened up to the public.

·         It is the only privately placed bond to be later listed in the market

·         It is the first Equity Linked Note to be listed on the NSE.

Our issue was rated A- by the Global Credit rating company; GCR.

This successful issue I believe is a mark of confidence by investors in the business and prospects of Centum.  We extend our gratitude to all investors who participated in the issue as well as the transaction team; The Nairobi Securities Exchange, The Capital Markets Authority and The Central Depository and Settlements Corporationfor making this issue a success.

The listing is also a show of commitment on the part of Centum to the deepening of Kenya’s capital markets. Centum intends to continue making use of the capital markets to raise financing and to give investors access to the investment opportunities that Centum has to offer.

Ladies and Gentlemen: In March 2009, Centum embarked on a new strategic plan whose goal was to significantly grow the assets of the Company and expand the footprint of the Company’s activities across the African continent.  We have since grown total assets from Kes 6 Billion at the start of the strategy period to Kes 19 Billion as at September 2012, while consistently outperforming the market. 

Centum is firmly on course in pursuit of its vision to be Africa’s foremost investment channel by positioning itself at the heart of mobilizing capital both from within the continent and globally for projects in diverse sectors of the economy. With Africa being the emergent economic frontier, we have positioned ourselves to take advantage of investment opportunities that will provide our shareholders with superior returns.

The proceeds of the issue have been applied towards concluding attractive investments that had been developed in the private equity and real estate business lines.

On the Private equity front; our focus has been on regional diversification in line. Our target investment geography has been Anglophone East Africa. 

We have recently concluded the acquisition of a 45% shareholding in Platcorp Holdings Ltd. Platcorp Holdings Ltd is the group holding company of Platinum Credit ‘Pesa Chap Chap’ operating in Kenya, Uganda & Tanzania. The Platinum Credit groups of Companies are non-banking, non-deposit taking micro lenders that provide emergency loans.

We also invested debt in Comz Africa, a Pan African entity in the Telecoms sector, and are at an advanced stage of closing an investment in the geothermal sector.

We are in the process of raising an opportunity specific private equity fund in which Centum will invest 40%.

On the real estate front, our strategy is premised upon the conversion of bare land to investment grade assets. We have made significant progress in realizing our vision of creating an integrated mixed use commercial development at Two Rivers and we are on target to break ground on the infrastructure development in July 2013. We have also made excellent progress on Pearl Marina and in December 2012 the ambitious Pearl Marina master plan was approved by the authorities in Uganda.These two projects are many ways transformative projects and they shall be the target of significant flows of capital from across the globe that are seeking African exposure.

Value will be created and crystallized throughout the development cycle of the project through sale of development rights and REITS.

We believe that flow of capital to the real estate market is bound to experience phenomenal growth once the CMA enacts the REITs regulations and the market is able to offer real estate as an investment class. Centum thanks the CMA for leading this initiative and is an active and keen participant on this development and will be looking to be one of the first entities to bring high quality, investment grade REITS into the market.

Our quoted equity business continues to diversify its assets by geography. Illustrative of our investment activities across the continent Centum acquired a significant stake in September 2012 in CAL Bank in Ghana one of the leading commercial Banks in that country. Centum is  CAL Bank’s fourth largest shareholder and the shares of CAL are among the best performing in the continent today having rallied by more than 60% since January 1, 2013.  

Finally:  I am glad to be part of an event that marks not only a success for Centum but for our Capital markets in finding new ways to deepen the capital markets through new product offerings.

Thank you.