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 2008- 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

Financials 44.3% Aon Minet Insurance Brokers 5% 21.50%

UAP Holdings 14% 24.23%K-Rep Bank 0.3% 3.78%

Kenya Commercial Bank 25% 3.58%Beverages 24%KWAL 2% 26.43%Mount Kenya Bottlers 4% 28.62%Nairobi Bottlers 6% 27.62%

Rift Valley Bottlers 4% 44.03%

Kisii Bottlers 3% 23.87%

EABL 6% 0.45%

Our Portfolio

% of total portfolio % Stake

Publishing-Longhorn 4% 35%

Automotive-GMEA 16% 17.82%

Services 4%

NAS Airport Services 2% 9.13%

Safaricom Limited 2% 0.10%

Infrastructure 0%

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 Performanc

e

2009 -24% -40% 16%

2008 -3% -5% 1%

2007 35% 21% 14%

2006 32% 8% 24%

2005 57% 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 Class Approach

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

17

1. 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