Companies

Former Centum executive ventures into private equity

owino

Ascent Capital Partner David Owino. Photo/Salaton Njau

Former director of private equity at Centum Investment David Owino has joined a growing list of Kenyan executives leaving employment to venture into wealth management.

Mr Owino, who quit the Nairobi Securities Exchange-listed Centum in October is now a partner at Ascent Capital, a private equity (PE) fund targeting investment opportunities in Kenya, Uganda and Ethiopia.

The PE fund has so far raised Sh3.4 billion ($40 million) out of a target of Sh6 billion ($70 million) by February next year.

“We see a lot of opportunities in mid-sized businesses that need an average of $4 million (Sh344 million) driven by growth of the middle-class,” he told the Business Daily in an interview on Monday.

“We will be closing a healthcare deal in Ethiopia in the next three months. We have a rich pipeline of deals and we’re now doing due diligence on the businesses identified.”

Mr Owino is a co-partner with Australian investment banker Guy Brennan and former Nokia executive Lucas Kranck.

Ascent Capital plans to invest between $3 million to $8 million in agribusiness companies, consumer, finance, services, fast-moving consumer goods, education and health in return for majority stakes or at least 25 per cent shareholding.

“We are not passive investors. We prefer taking control so we can provide operational support to reorganise businesses to grow to the next level,” said Mr Owino.

The life of Ascent Capital’s fund is expected to be 10 years.

The partners are fundraising from European development finance institutions, high-net-worth individuals from Hong Kong and Singapore, local pension and insurance firms. It is also scouting for investment opportunities in Tanzania, Rwanda and Burundi.

Mr Owino, 40, joins the ranks of executives who have set up their own PE funds including Tony Wainaina, former TransCentury CEO who set up Fanisi Capital with Ayisi Makatiani.

Paul Kavuma was previously a director and head of East Africa private equity at Actis before he established investment fund Catalyst Principal.

Luke Kinoti who was country director at international microfinance organisation ECLOF, cofounded Fusion Capital in 2006.

Mr Owino was in charge of Centum’s PE portfolio worth Sh11.2 billion as at March 2013. Centum had a total portfolio of Sh19.3 billion invested across assets in listed firms, private equity and real estate in Africa.

Ascent Capital’s preferred exit route is through public listing and sale to other PE funds or investors.

“SMEs are high risk and therefore offer high returns. The key challenge is unmasking the counterparty to know who you’re dealing with,” he said.

Oslo-based PE firm Norfund last year made Sh463.4 million from the sale of its 5.6 per cent stake it had acquired in Family Bank in 2010 for Sh278 million — representing a return of 66.6 per cent — and highlights the high returns available for PEs in Kenya.