NAIROBI, Kenya, Jan 9 – Over Sh22 billion acquisition deals occurred in Kenya’s financial services sector according to the Cytonn Annual Market Review 2018.
The deals saw some international private equity funds entering Kenya or increasing their stake in entities that include Kuramo Capital, a New York based investment management firm focused on alternative investments, Mauritius based SBM Holdings, AfricInvest, a private equity and venture capital firm based in Tunisia and Badoer Investments Limited, a Dubai-based investment firm.
In the deals, Kuramo Capital, acquired a 90.9 per cent stake in GenAfrica Asset Managers Ltd from the management and staff of GenAfrica Asset Managers and Centum Investments who held 17.5 per cent and 73.4 per cent respectively.
Kuramo earlier in the year also completed a transaction to acquire a minority stake in Kenyan investment bank, Sterling Capital for an undisclosed amount.
Mauritius based SBM Holdings, a banking institution with headquarters in Port Louis, Mauritius, through its subsidiary SBM Kenya Limited acquired certain assets and liabilities of Chase Bank.
SBM Kenya assumed 75 per cent of the value of the deposits and took control of 62 branches and employees.
SBM has injected Sh2.6 billion in Chase Bank and is planning to inject a further Sh6 billion to revive the bank.
AfricInvest, a private equity and venture capital firm based in Tunisia with a focus on agribusiness, financial services, healthcare, education and commercial sectors, completed a transaction to buy a 14.3 per cent stake in Britam, a diversified financial services group that is listed on the Nairobi Securities Exchange, for Sh5.7 billion.
Following the transaction, Swiss Re, a reinsurance company based in Zurich, Switzerland, also acquired a 13.8 per cent stake in Britam for Sh4.8 billion.
Old Mutual, a UK based international financial services group providing investment and savings, insurance, asset management and retirement solutions, increased its stake in UAP – Old Mutual Holdings from 60.7 per cent to 66.7 per cent, in a deal to purchase a 6 per cent stake in UAP-Old Mutual for Sh3.1 billion from Chairman Joe Wanjui and Director James Muguiyi.
Other deals include Badoer Investments Limited, a Dubai-based investment firm that bought a 15.6 per cent stake in Sumac Microfinance Bank for Sh100 million, while European financial services company Allianz Group agreed to acquire 8 per cent in African reinsurer Africa Re for Sh8.14 billion, effectively valuing the firm at Sh101.8 billion.
Fonds Européen de Financement Solidaire (Fefisol), a Luxembourg-based private equity firm invested Sh100 million in Kenya’s Musoni Microfinance Limited for an undisclosed stake.
The report maintains a positive outlook in private equity investment in the financial sector despite the recent slowdown in growth, as evidenced by the increasing investor interest, which is attributed to economic growth, which is projected to improve in Africa’s most developed PE markets, attractive valuations in Sub Saharan Africa’s private markets compared to its public markets, and attractive valuations in Sub Saharan Africa’s markets compared to global markets.
“Going forward, the increasing investor interest, stable macro-economic and political environment will continue to boost deal flow into African markets,” the report states.