We all at some point, need an investment bank, especially when you are looking for funding for your business. Today we will look at investment banks in Kenya you can pick from.
Investment, banks are essential because they serve as a sort of intermediary between you or your corporation and investors through initial public offerings (IPOs). They can also help you obtain debt financing by fighting investors for corporate bonds.
What is an investment bank
An Investment bank is a particular segment of banking operations. It helps individuals or organizations raise capital and provide financial consultancy services to them. They act as intermediaries between security issuers and investors and help new firms to go public.
In Kenya, investment banks are regulated by the capital markets authorities and the Nairobi Securities Exchange.
Investment banks in Kenya
The banks in Kenya include:
1. ABC capital (African Investment Corporation Limited)
Is an indigenous Kenyan commercial bank established in 1984
As an investment bank, it has been financing businesses and projects that benefit the people and the planet. It is licensed and regulated by the Central Bank of Kenya (CBK).
ABC Bank offers financial solutions to corporations, medium-sized businesses, Saccos, institutions, small business enterprises, as well as individuals.
2. Dyer & Blair Investment Bank
Was founded in Nairobi in 1954 as a partnership of Stockbrokers Hickman & Grey. The investment firm engages in regional investment banking, securities, investment management, and other financial services with both Individual and institutional clients.
Among its investment achievements, Dyer & Blair won the tender to be the transaction adviser for the USD 840 Million Safaricom IPO. This was to the most extensive offering in the Eastern Africa region.
3. Equity Group Holdings Limited (EGHL)
EGHL was founded in Kenya, the largest economy in the East African Community, as the Equity Building Society (EBS) in October 1984. EBS was initially a provider of mortgage financing for customers in the low-income population.
EGHL is a large financial services conglomerate. As of 31 December 2017, it had assets exceeding KSh524.5 billion (US$5.243 billion).
At the time, total group customers were 12.1 million in 6 African Great Lakes countries, with KSh373.1 billion (US$3.73 billion) in deposits.
4. Faida investments bank
Faida Investment Bank Limited (“Faida”) was licensed in 1995 by the Capital Markets Authority (CMA) to operate as stocks and securities broker.
In December 2007, it converted into a full-fledged Investment Bank.
Faida is among the leading investment banks in Kenya, linking investors to opportunities that will lead to wealth creation.
They offer well-researched information and carry out thorough due diligence that will enable investors to make informed decisions.
Faida has an extensive retail franchise and distribution network in the country, and have an associated company in Rwanda, Faida Securities Rwanda Ltd.
The firm serves as a full-service Investment Bank and has provided the following activities:
5. Renaissance Capital
It is an emerging and frontier markets-focused investment firm founded in 1995 in Russia.
Since 2012, Renaissance Capital has been part of ONEXIM Group, one of the largest private investment holding companies in Russia.
Renaissance Capital has been active in Africa for several years. The firm established a presence on the continent in 2007 in Lagos and Nairobi and Johannesburg, Cape Town and Cairo in 2010, 2015 and 2017 respectively.
The investment firm offers investment banking services in debt and equity capital markets, M&A equity and equity derivatives, fixed income, FX and FX derivatives, commodities products, prime brokerage, research, as well as REPO and financing
The firm has assets worth approximately $3,260 million and Equity of around $486 million, as of the end of 2017.
6. Genghis Capital
It is an innovative and customer-focused Investment Bank licensed by the Capital Markets Authority (CMA).
Formerly a stock brokerage before it expanded its services beyond stock brokerage to include the provision of Unit Trust Funds, Fund Management as well as Corporate Finance services.
The Bank was in August 2016, acquired by Overtime Capital Limited a particular purpose vehicle that has been established by investors led by Pamoja Capital Limited (Pamoja).
Pamoja is a regional corporate finance advisory boutique, with over ten years in the market, with offices in Nairobi and Johannesburg.
7. Standard investment bank
It is one of the leading investment banks in Kenya. It has shareholder funds of up to Ksh750 million. Beyond that, it has a proven track record of executing large and complex transactions for local and foreign clients.
It is the leader in fostering regional market development through cross border partnerships.
8. Kestrel Capital
Kestrel Capital is an independent Investment Bank licensed by the Kenyan Capital Markets Authority (CMA). It is also a member of the Nairobi Securities Exchange (NSE).
Kestrel is the leading equities and bonds trader on the Kenya stock market for institutional and high net worth investors, with a strong focus on market and company research.
Some of its services Stockbroking and bond trading, commercial paper placing IPO’s and NSE listings, corporate finance advisory, company and market research, Private placements of equity and debt and fairness opinions and valuations.
9. African Alliance Kenya Investment Bank
African Alliance Investment Bank (AAIB) is an investment banking group with operations in Africa.
AAIB is committed to building and developing local talent. They are committed to establishing and adapting their model to the rest of the continent.
Their mission is pegged on building markets and people where they operate sets them apart. They understand that pioneering work is lengthy and difficult.
The group engages in activities such as brokerage services, financial research, wealth management, corporate finance, private Equity, and third-party administration.
10. Sterling capital
Sterling Capital Ltd is a member of the Nairobi Securities Exchange. It provides equity & debt financing to grow your business profitably.
Their services include asset management, stock brokerage, fundraising for businesses, research and advisory.
Types of investment banks
The firms engaged in the investment banking industry are commonly classified into three categories:
1. Bulge bracket banks
These are the major banks that operate internationally. They have easily recognizable names such as Goldman Sachs, Deutsche Bank, Credit Suisse Group AG, Morgan Stanley and Bank of America.
They provide their clients with the full range of investment banking services, including trading, all types of financing, asset management services, equity research, and issuance.
The majority of clients are Fortune 500 firms and multibillion-dollar M&A deals. However, depending on the overall state of the economy or the particular client, a bulge bracket bank may sometimes handle deals valued in the low hundred million.
Most bulge bracket banks also have commercial and retail banking divisions and generate additional revenue by cross-selling financial products.
2. Middle-market banks
This is banks that occupy the middle ground between smaller regional investment banking firms and the massive bulge bracket firms.
Middle-market banks usually work on deals that begin around the regional level and go up to near the bulge bracket level, typically ranging from about $50 million up to around $500 million or more.
Middle markets are usually also in the middle ground as far as geographic reach, having a substantially more significant presence than regional boutiques but falling short of the multinational scope of bulge bracket banks.
3. Boutique banks
This is a small financial firm that offers specialized and personalized investment management, banking, or niche financial services.
These firms usually handle deals of less than $500 million. It may offer its bankers more autonomy to operate than they would be able to in a large or “bulge” firm.
Small boutique banks depend on creating strong customer bonds and networking to maintain critical connections.
These boutique firms may specialize by industry, client asset size, banking transaction type, or other factors to address a market not well addressed by larger firms.
Role of investment banks in Kenya
Investment banks act as middlemen between the large corporations and investors.
They also act as advisory agents to businesses and the government so that they can attain financial independence.
The banks evaluate the company and determine a reasonable price at which to offer stock shares.
They act in several different advisory capacities for their clients. In addition to handling IPOs, the banks offer corporations advice on taking the company public or on raising capital through alternative means. Investment banks regularly advise their clients on all aspects of financing.
Handling mergers and acquisitions is a significant function of investment firms. As with IPOs, one of the main areas of expertise for an investment bank is its ability to evaluate the worth of a possible acquisition and arrive at a fair price.
Investment banks in Kenya: Conclusion
In Kenya, Investment banks’ clients include corporations, pension funds, other financial institutions, governments, and hedge funds.
Typically, the bigger the size is an asset, the more connections the Bank has within the market. The more likely it is to profit by matching buyers and sellers, especially for unique transactions
The banks are a bridge between large enterprises and the investor. Their primary roles are to advise businesses and governments on how to meet their financial challenges. They help them procure financing. It can be from stock offerings, bond issues, or derivative products.