Here are NSE’s investment bankers’ succession plans
Standard Investment Bank CEO James Wangunyu and son Donald (top and bottom left); Dyer & Blair chairman Jimnah Mbaru and daughter Cynthia (top and bottom centre); and Faida Investment Bank chairman Bob Karina and daughter Rina Hicks.
Kenya’s top investment banks are laying the ground for the takeover of their companies by heirs in an elaborate succession plan seeking to ensure the continuity of the businesses at the Nairobi Securities Exchange (NSE).
Proprietors of four market intermediaries —Faida Investment Bank (FIB) Ltd, Standard Investment Bank (SIB), Dyer & Blair Investment Bank and Sterling Capital Ltd—which have dominated equity and bond trades for many years are preparing to exit the stage, demonstrating the looming change of face among the stock and bond dealers at the Nairobi bourse that is fighting to regain its footing following collapse of the stock market boom more than 17 years ago.
The four market intermediaries had been the major beneficiaries of lucrative advisory deals in initial public offerings (IPOs), rights issues and bond issues that flooded the market during the five-year stock market boom (2003-2007) that created overnight millionaires and pulled thousands of new investors to the market including the stock market greenhorns.
Business succession planning is the process of identifying and developing talent within or outside of the business to replace owners or key employees when they transition into new positions or exit the business.
Some of these stock market tycoons who spoke to the Business Daily expressed a believe that their companies are in safe hands and that the youngsters they have worked hard to mentor have what it takes to ensure continuity and contribute towards revival of activities on the stock market which have stagnated in terms of new listings and cash calls.
“On the onset, I must say my two sons Donald and Nickay undertook degree courses relating to computer science & software. It is as if they knew computer science would be the main drivers of industrial and business revolution,” says James Wangunyu, founder and chairman of Standard Investment Bank (SIB), a 29-year-old investment bank that also operates fund management and pension management businesses.
“The two sons have been with Standard Investment Bank for over 17 years. I’m aware that one does not succeed in business until he succeeds in succession. Both sons are very well groomed and will be able to fit in my shoes and march or exceed my expectations and achievements at the Kenya Stock Markets and beyond.”
A review of the management and board composition of the four investment banks reveals a plan for succession, with potential heirs appointed to key strategic positions including the board of the Kenya Association of Stockbrokers and Investment Banks (Kasib), a lobby group championing the interest of stockbrokers and investment banks in the country. For instance, Kasib has appointed Wangunyu's son Donald and Cynthia Mbaru to its board serving as chairperson and deputy chairperson respectively.
Cynthia is the daughter of Jimnah Mbaru, the founder and chairman of Dyer & Blair Investment Bank. Cynthia also serves as a director in-charge of corporate finance division at Dyer &Blair Investment Bank.
Donald is an executive director at SIB and the founder and chief executive of FourFront Management, the first licensed Robo-Advisor in Kenya and the pioneer of algorithm-based trading (ALGO-Trading), high frequency trading (HFT) and Short Selling on the NSE.
He joined SIB in 2008 to head the operations department with an emphasis on risk management, compliance, and operational excellence – eventually incorporating business development – before transitioning to his current role. Additionally, he chairs the risk and compliance committee at SIB and is the chairman’s representative for Shariah products of the investment bank.
His brother Nickay Wangunyu serves as an executive director incharge of strategy & operations at SIB.
“In addition to running the Robo Advisor division of SIB, which is the first ever licensed Robo Advisor in the country, he (Donald) is indeed the face of SIB beyond our corridors,” says Mr Wangunyu.
“Through these positions, Donald has been instrumental in shaping capital markets policy in Kenya, leading to its growth and sophistication.”
Bob Karina, the chairman and founder of Faida Investment Bank (FIB) Ltd has appointed his daughter Rina Hicks as the company’s operations director. Ms Hicks also serves as a director on the board of Kasib.
“With me I’m happy with Rina (daughter). She has met and exceeded expectations.
“So I have no worries if anything was to happen that we don’t have any other person who can take up. There is nothing she doesn’t know about this market,” says Mr Karina.
At Sterling Capital Ltd, Stanley Ngaine, the founder and chairman of the company has relinquished the management of the investment bank to his son David Ithanya.
“Certainly it is the right thing (succession) to do for the older people to give way to the young ones but how they (young ones) move the market forward depends on the capacity of the individuals,” says Mr Ngaine.
The four proprietors— Wangunyu, Mbaru, Karina and Ngaine— have held various positions on the board of the NSE, including chairmanship and have been very instrumental in reforming the stockmarket through, among others, demutualisation of the exchange and introduction of automated equity.
Demutualisation refers to the change in the legal status of the securities exchange from a mutual association of exchange members operating on a not-for-profit basis to a limited liability, for-profit company, accountable to shareholders.
