Centum acquisition gives access to cheaper capital

Centum Investment intends to acquire a controlling stake of up to 73.35 per cent in fund manager Genesis Kenya barely three months after it received a licence to operate its own fund management business.

Centum’s management declined to disclose the value of the transaction, which is subject to regulatory approvals from the Competition Authority of Kenya, the Capital Markets Authority and the Retirement Benefits Authority.

“The intended acquisition is in line with Centum’s strategic objective of growing third party funds,” said the company in a statement.

The transaction will earn Centum dividend income based on performance of the fund, and even more strategically offer the NSE-listed investment firm cheap cash for its capital intensive projects.

Genesis Kenya manages funds worth more than Sh100 billion for clients within and outside Kenya and is ranked as the second largest pension fund in the country after Pinebridge Investments as per end of last year.

In June, Centum disclosed it was venturing into fund management after receiving a licence to open a new asset management subsidiary, Centum Asset Managers, which started off with a Sh6 billion portfolio.

Centum CEO, James Mworia, said the two fund management units will run as separate firms.

“For now they will operate separately. Our intention is to have Genesis run as an independent body,” said  Mr Mworia.

Centum is currently undertaking capital-intensive real estate projects in Kenya and Uganda and also plans to venture into the power sector.

It also has investments in Kenya Wine Agencies, Platcorp (the holding company of micro lender Platinum Credit), UAP Insurance, publisher Longhorn among others. The firm’s total portfolio was valued at Sh19 billion as at March this year.

Genesis describes its investment strategy on its web page as long-term and based on deep research work.

Its chairman is listed as Jeremy Paulson-Ellis and its directors include Michael Somen, associated with Access Kenya and Richard Omwela, a managing partner at law firm Hamilton Harrison and Mathews.

Genesis was established in Kenya in 1996 and is also licensed in Uganda.