MIND SPEAK PRESENTATION BY JAMES MWORIA 1

Agenda 2 1. Background 2. Centum 3. Investment Planning

Background 3

Career Progression 4  2001 – ICDCI intern  2001 – ICDCI Management Accountant  2004 – ICDCI Head of Investments  2007 – TCL Head of Investments  Centum CEO

Centum 5

 Centum is the investment channel that provides investors access to a diversified portfolio of unquoted and quoted investments  Our focus is on making investments in private equity (62%), public equity (35%) and real estate  Our vision is to become “Africa’s foremost Investment Channel.”  Our mission is to create real, tangible wealth by providing the channel through which investors access and build extraordinary enterprises in Africa Our core business

Our Portfolio % of total portfolio% Stake Financials44.3% Aon Minet Insurance Brokers5%21.50% UAP Holdings14% 24.23% K-Rep Bank0.3%3.78% Kenya Commercial Bank 25%3.58% Beverages24% KWAL2%26.43% Mount Kenya Bottlers4%28.62% Nairobi Bottlers6%27.62% Rift Valley Bottlers4% 44.03% Kisii Bottlers3% 23.87% EABL 6%0.45%

Our Portfolio % of total portfolio% Stake Publishing-Longhorn4% 35% Automotive-GMEA16%17.82% Services4% NAS Airport Services2%9.13% Safaricom Limited 2%0.10% Infrastructure0% Rift Valley Railways (Pty)0%10% Others 4%<1.00% & more recently 23% of Carbacid

Centum Corporate Performance Vs NSE Index Annual Percentage Change Year Per Share Book Value of Centum NSE Index with Dividends included Relative Performance %-40%16% %-5%1% %21%14% %8%24% %49%8%

 Market valuations across most asset classes have come down significantly  Market sentiment is very low and this has reduced investor appetite  Risk aversion has increased and this has resulted in increased equity risk premium and higher emerging market risk premiums hence reducing pricing  Many emerging market private equity funds and hedge funds are scaling back Current Situation

 More attractive buying environment with more reasonable valuations  Reduced competition from other investors  Increasing equity investment opportunities as alternative funding options become tighter  Reduced appetite for debt has created demand for equity investment among companies Opportunities

 Permanent capital vehicle with a strong financial position, low leverage and high stable cash flows  Our portfolio companies are market leaders in their sectors with very strong competitive advantage, this positions them to fare well even in a down turn  Flexibility to invest in illiquid assets and outside Kenya  A solid track record in making and managing private equity investments Competitive Position

Investment Approach 13  Aim to deliver consistent market beating returns  Invest in companies with a track record that solve basic needs or that displace sub-optimal solutions in markets that we understand  sub-Sahara Africa represents the largest region of untapped demand in the world

 We will focus on making investments in the following asset classes across Africa: 1. Private equity: take controlling and minority investment opportunities in unlisted companies 2. Quoted Private Equity: take influential positions in listed companies and employ private equity techniques to create value 3. Real Estate: build a diversified portfolio of real estate investments Strategy Highlights

What we invest in Asset ClassApproach Private Equity Make investments of between Kshs 160 – 800 mm per investment to acquire either a controlling or minority equity position Quoted Private Equity Acquire influential stakes in quoted companies and employ private equity techniques to create value Real Estate Make real estate investments with a cash flow stream or where one is imminent within 18 months

Investment Planning 16

Investment Planning Process Planning 2. Execution 3. Feedback

Case Study 18  Mary is a 30 year old marketing executive in a large multinational FMCG company  Her current monthly take home pay is Kshs 130,000  She expects 5% salary increase every year  She plans to retire with her husband John in Lamu at age 55  She wants to be able to earn Kshs 500,000 a month in passive income for the rest of her life once she retires. She also hopes to still leave behind a sizable inheritance upon her death  She is able to save Kshs 30,000 per month increasing by 5% every year

Problem? 19  Is Kshs 500,000 a month a realistic return objective?  Is Mary’s salary consistent with her dreams?  Should she move to a better paying job?  What sort of return must she aim for?  Should she agitate for an extension of the retirement age?

Mary’s Investment Plan 20  Mary decides to Invest Kshs 360,000 annually increasing at 5% per annum  Mary is a very conservative person and against the advice of her husband John she invests in what he considers very low return assets yielding 12% a year  John is very skeptical that Mary’s savings will amount to much and he does not shy from telling her so

Mary’s Wealth Accumulation 21

Results of Investment Program 22  Upon retirement Mary has a portfolio worth Kshs 78m  She will have invested a total of Kshs 17 m  Her portfolio will generate a passive return of Kshs 780,000 upon retirement  Mary will be able to spend more and still save more in retirement than she did while employed

Myths about Successful Personal Investing 23  You need to be making a lot of money  You need to have special knowledge  You need to invest in very high return assets  You need to work for a long time

Many thanks & Q&A 24