Kenya’s super-rich worried by succession

The attitude survey, which was conducted in collaboration with wealth intelligence firm Wealth-X, found that 76 per cent of the 8,962 dollar millionaires in Kenya expressed doubts over their children’s readiness or willingness to oversee continuity of the family businesses in their absence.

“Many of our clients are very concerned about matters of succession and how their children will deal with the pressures of inherited wealth,” said Deon de Klerk, Head of Africa and International Wealth and Investment at Standard Bank.

Knight Frank partners with South Africa-based Standard Bank to compile the African segment of the Global Wealth Report.

Standard Bank has a wide presence in Africa, which it uses to collect and collate the data, including in Kenya where it is the majority shareholder at CFC Stanbic Bank.

The bank has a Wealth and Investment department that exclusively deals with high net worth individuals.

Mr Klerk said that succession has become a growing concern for Kenya’s super-rich more of who are seeking solutions that will ensure continuity in their absence.

Anjali Harkoo, the Head of Wealth and Investment at CfC Stanbic Bank, said most of the super-rich have taken to grooming their children from an early age hoping to deepen their grasp of the business. 

READ: Succession wars lift lid on the wealth of Kenyatta era oligarchs

Stanbic Bank has leadership academies in South Africa and London that train women and children above 10 years on the necessary financial skills for successful management and transfer of wealth between generations.

“We have seen some of our clients begin to train their children from an early age.

Some of our clients (in the Wealth and Investment department) have even gone to the extent of transferring most responsibilities to the children as a way of training them to run the business,” she said.

The 2016 Global Wealth survey also found that Kenya’s super-rich are concerned about the large amount of legislation on personal wealth, personal and family security, health and compliance with environmental laws.

The survey, however, found that local dollar millionaires are less concerned about money laundering laws, online security and privacy.

The findings came in the wake of a steep rise in the number of family feuds over control of wealth left behind by the super-rich.

Retail chain Tuskys is the latest firm to experience such a feud with the ejection from office two weeks ago of the chief executive, Dan Githua, by a mob that was later identified as the grandchildren of the company’s founder, Joram Kamau.

READ: Retailer Tuskys in turmoil as owners eject chief executive

Children and wives of Gerishon Kirima, another rich businessman who died seven years, have also been fighting nasty public battles for control of his vast estate.

The highly publicised battles have pitted Mr Kirima’s first two wives and children against his third wife, leaving dark clouds over the business empire. The matter was settled in court in 2013 with the distribution of the wealth among the three wives and children.

Wives and children of the late James Kanyotu, the spy chief during the Jomo Kenyatta regime, have also been fighting succession battles over his Sh15 billion estate following his death in 2008.

Mr De Clerk said that where succession was a big issue, having multiple stakeholders to ensure business continuity and smooth transition would act out well if the founders passed on.

The survey also found a growing trend where women are seeking to play a more active role in the family business.

Mr De Klerk said that although most super-rich clients have joint accounts with their wives, there is an emerging trend where women are taking up active roles in managing finances.

Women prefer formalised financial plans, he said.