Centum, one of East Africa’s largest investment firms, cross-listed its shares on the Uganda Securities Exchange on February 10. Walter Wafula interviewed Mr James Mworia about the firm’s strategy in Uganda.
How do you describe Centum to a potential investor?
We are an investment channel that provides investors access to inaccessible investment opportunities. The access is a result of the fact that we are now listed on two exchanges; the Nairobi Stock Exchange and the Uganda Securities Exchange. So investors are able to buy and sell their shares. In exchange for what they invest, is the underlying portfolio of investments that Centum has.
This portfolio is largely skewed towards companies that are not listed on any exchange.
Primarily private equity and real estate –those two segments account for more than 70 per cent of Centum’s assets under management. Our focus is to give investors access to investment (UAP Holdings, Coca Cola, Nairobi Bottlers, and General Motors East Africa) that they would not otherwise have bought. The opportunity for Ugandans is now even greater. You are getting access to private blue chip companies that are not listed, you are getting access to attractive real estate projects and to regional companies.
What sort of attractive real estate projects are these?
We are seeking to create world-class planned neighbourhoods where people can live, work and play. The project in Kenya is sited on 100 acres and in Uganda on 300 acres in Garuga. What we are aspiring to do is to create new neighbourhoods that are planned to international standards. Where there’s an integrated development of residential, commercial, recreational and other sporting hospitality facilities.
Why focus on real estate and not agriculture which is the backbone of the economy?
The key challenge that a lot of Sub-Saharan cities face is that we have not had any new neighbourhoods being developed over the last 20 years, in the interim, the population has expanded greatly. This has led to straining of the existing infrastructure such as roads, electricity, water and electricity and other amenities that make life easy for people living there.
In Kampala most modern estates like Kensington are only accessible to the upscale market, how affordable will your homes be?
We are looking at developing estates that respond to the needs of Ugandans not South Africans, Kenyans or Zimbabweans and part of that is determining the needs of the Ugandans and what they are willing to pay. So we will provide market needs at an affordable price.
After 44 years in operation in Kenya, why are you turning to Uganda?
In 2009, we made an investment decision to focus on the rest of Africa and to take Centum from being a Kenyan company to a Pan-African oriented investment company. The era of business being done in your home country is gone. There’s a lot of movement of people and capital. Tastes and preferences have become largely standardised. Communication through the internet has broken down barriers and that is part of the globalisation and regionalisation that we are seeing today. To be able to compete in the coming decades, it will no longer be viable to operate as single country entities and it is in recognition of that we made a decision to become a Pan-African company. We want to invest across Africa but we also want to mobilise resources across Africa so that the ownership of Centum is all inclusive.
Why have you opted for cross listings as the modes of distributing Centum’s ownership rather than IPOs at appropriate times?
It’s a sequential process. We first want to cross list, so that our shares are traded in various new markets and various participants understand what our business is. Then when it comes to raising capital, through IPOs or in our case a secondary capital raising, the market already knows a lot about the company.
What is your view of the political climate in East Africa?
I think the political and governance environment is improving. As investors, we are satisfied with our political climate. East Africa is a very open society. If you look at Egypt, they have been operating for the last 30 years on emergency laws and without a vice president. In Kenya, we have seen a new constitution enacted and we are in the process of implementing that constitution.
What is Centum’s perception of Uganda in the next decade?
We are very positive. Within the next five years, Uganda is going to be commercially exploiting the oil reserves that it has. That is going to be a new source of capital and therefore it’s going to enhance capital accumulation.