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US Equity fund Kuramo buys stake in Kenya’s Sterling Capital

Shaka Kariuki, Kuramo’s chief executive. PHOTO | SALATON NJAU | NMG
Shaka Kariuki, Kuramo’s chief executive. PHOTO | SALATON NJAU | NMG 

New York-based equity fund Kuramo Capital has completed buying a minority stake in Kenyan investment bank Sterling Capital, which is now set for local and regional expansion.

Shaka Kariuki, Kuramo’s chief executive, has joined the Sterling board as vice chairman alongside the fund’s co-founder Wale Adesoun after buying out two existing shareholders — Ahmed Ndope and John Kirimi — for an undisclosed amount.

The brokerage’s founder and shareholder Stanely Ngaine is also on the board as chairman with another directorship being held by Reithfield (K) Limited, the business’ third co-owner.

Kuramo, the single-largest shareholder of NSE-listed infrastructure firm TransCentury #ticker:TCL, and the two other shareholders are now set to inject Sh200 million into the business, which was granted an investment banking licence last October.

“With the coming in of Kuramo as shareholders, there is heightened urgency to be more responsive to opportunities and to our clients,” said David Ngaine, Sterling Capital’s managing director and son to the founder.

Sterling, an investment bank founded in 1994, mainly deals in equities and fixed income trading as well as offering advisory services. The business has 25 employees. In the year to December 2016, it was the second-largest bond trader in the country raising its market share to 15.3 per cent from 6.5 per cent the previous year.

Kuramo’s investment will see Sterling grow its Nairobi-based business into other countries and expand its services to include advising clients during big ticket initial public offers and rights issues.

“Sterling is a soberly run company with a lot of potential to grow as an investment bank both locally and regionally,” said Mr Shaka.

“Further, there are areas of collaboration between both Kuramo and Sterling that can add value to both firms which we intend to explore.”

Kuramo, which last year bailed out TransCentury with Sh2 billion in return for a 25 per cent stake, has 21 investments across the continent, including in other funds like Catalyst Fund, Helios and Verod Capital Management.

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