Charles Omanga — transcript

Horizon Africa Capital Ltd

This transcript is generated automatically by YouTube and has not been checked by a person. It misspells names and mishears words, particularly around Kenyan English and company names, so read it as a guide to the conversation rather than a quotable record. Each timestamp opens the video at that moment.

0:05 Greetings, ladies and gentlemen, and wel- welcome to episode 69 of the African Loop podcast. Today, we delve into the world of finances and money, and we are privileged to have with us a very old friend of mine, Charles Omanga of Horizon Africa Capital Limited. Charles, welcome to the African Loop podcast.
Thank you very much, Lenny.
So, um maybe it's time to let you guys know that Charlie is one of my oldest friends because we were together in primary school. And then we found ourselves in the same secondary school.
Mhm.
And then we've remained uh friends through our careers, and now we do quite a bit of work together. So, Charlie, we'd like to start the podcast by talking about where you've come from as an individual, yeah? And I'll not go back to primary school days, but I'll start maybe from from uh post university, yeah? You found yourself in banking. Yeah? And um if you're to look at things from a Kenyan context, yeah? Banking is one of the careers that, you

1:10 know, if you go to a traditional African family and tell your parents you've become a banker or you're a banker, it's one of the places where you are advised, you know, stay stay there. It's good, you know, you get you get cheaper loans than the the rest of the world, you know, you can you can build a good asset base.
Mhm.
So, maybe tell us a bit about your banking career, and then we can speak about what inspired you to transition out of the safety of banking and and start um something of your own.
Okay. Um thanks a lot again.
Yeah.
Um let me start with uh banking was uh because I didn't want to be a systems analyst.
Yes.
Um so, after uh university, I ended up at Can India. Okay.

2:00
Writing code?
Yes. After doing degree in MIS, but then I found a bailout to do my masters. Once I did my masters, then um uh there was a fair called Career Gardens. And during the point I was doing my masters, I applied to go to Career Gardens. And then three banks wanted to talk to me
Okay.
after we put in CV to come back home. So one was City, the other was StanChart, um two banks actually, and then Eli Lilly, the pharmaceutical company.
Yes.
But I picked City at the end of the day, and then began my career there as a management associate. Um So I did the rounds um uh at City. Uh deep end, lots of learning. Uh and uh and then a position in management on their cash management product side.

2:57
Okay.
Non-banking financial institutions, and then the late Amin Habib, who was the head of corporate banking, then moved to Absa.
Mhm.
And
At that time, Barclays.
At that time, Barclays.
Yes, yeah.
At that time, Barclays. And it was a first move into I guess the corporate banking. Um and he asked me to head up their trade finance business. Which I had not done before.
Mhm.
So that great leap of faith he took in what I was doing there. I I did that job. I headed it up regionally. And then I had the opportunity to get into some mainstream hardcore banking when I did when I ran the public sector book for Absa.
Okay.
At that time, the first Safaricom bond um the I think they were triple sevens pre-development for KQ. Yes. Yes. The restructuring of Telecom Barclays was one of the big banks at that point in time that helped restructure and then it it obviously got sold. So I got core banking experience there. And then went to Stanbic after they bought CFC Bank that merger and I headed up merged corporate banking team there. Okay.

4:25 With the greatest respect to the institutions, I think at some point having worked for bosses here in South Africa and in the UK and then that's just direct line and then product function whether it's lending cash management or asset finance etc. I somehow got disillusioned with the paperwork. Okay. Yeah. Lots of paperwork, lots of client calls etc. and I felt that what what I was doing wasn't getting close to the clients as I had begun. And so in late 2009 my late partner passed away in 2023 contacted me and said listen you knew him before. I I did. I had worked with the late Hanif at at Barclays. Yes. He had taken a year off to go to business school Chicago Business School and and during that time he did a transaction. He advised on a transaction. So then he came to me and he said look you know this might be more interesting than what you're doing. It's risky

5:38 but I think I really want us to to form a small team that does transactions purely.
Mhm.
Um and people who love finance.
Yes.
Um So, I thought about it.
Mhm.
Um long and hard.
Mhm.
Um and then I kind of said, "Look, what's the downside here?"
Yeah.
Yeah? Uh the downside is the biggest downside and this is this is a discussion I had with my wife then is we lose the mortgage.
Mhm. Mhm.
Yeah?
Mhm.
Um but before we lose the mortgage, we'll see that coming.
Mhm.
From a mile away, right?
Yes.
Yes.
Um and so there's no pride if at that point this doesn't work, I'll put my CV out there and I'll you know, I'll see whether I'm still useful to the market. So, we took a leap of faith. I became employee number three. He started before I did, but because I had some gardening leave to do.

6:42
Yes.
Um and we started very modestly um even though we were cowards.
What is it at the beginning when you start?
At the beginning it's uh it's a mandate.
Okay.
It's uh it's it's work that I've picked from you
Mhm.
with a promise to deliver whether it's equity or it's debt or a transaction.
Yeah.
Um I'll begin by saying we were cowards
Mhm.
because we decided to invite some partners in at that point in time.
Okay.
And we decided to invite in our minds we felt who are the people that know about transactions that would feed us the give us the feedstock.
Yes.
Cuz our fear was not getting work.
Mhm.
They would give us the feedstock in order for us We weren't We were confident in execution. Um and then we figured it was lawyers. And so, we went to some of them top lawyers um, in Kenya, in Dubai, in, uh, in Mauritius, I think in Botswana as well. And we asked them to help seed us.

7:54
Okay.
And so they became, uh, silent partners as it were in the in the in the in the business. And their incentive was to bring us the work, we execute, and of course they make the financial gain
Okay.
that one would do as a as a as an investor. So we we got, um, it for 2010, a significant amount of money, about $300,000, which was the runway that we needed to start the business.
Yes. Yes.
Yeah.
And in in in a space like that, so you are basically you know, sometimes when we we talk transactions, book deal size, for the average layman, that that may sound a bit like Greek Greek, yeah? So if I could ask you to just tell us at that point, what was that firm? Assume that I have no knowledge of how transactions are put together, yeah? What did you do for the market?

8:51
Um, at that time we were relying on our past,
Yes.
uh, past experience in the big banks.
Mhm. Mhm.
So we had clients who trusted us as people
Yes.
and in our abilities.
Yes.
That's what we had. And we had a team, we were a team of four with an admin staff of one.
Okay.
Um, and, um, but the freshness that we brought, I think, in in, uh, and we were fairly lucky to do a very big transaction fairly quickly, was that we did everything.
So someone needs money
Yeah.
in their business,
Yeah.
they would come to you.
Yeah.
The equivalent of how a a business is trying to raise capital to do something, you know, it's for growth or for expansion and ETC. So you go to your bank and say, "These are my needs. Help me put this together."

9:40
Right.
And then you now start by give them advice.
That's it.
Is that Is that
That's in a a very very good nutshell. Yes.
So, you you you you go in and say, "Okay, I'm trying to raise, you know, 100 million shillings because I want to upgrade my manufacturing machinery and this will lead to" So, you do all the work behind that.
Everything. We tell the story on behalf of the owner.
Okay.
Right? We tell the But first we lift the bonnet.
Yes. Of the business.
Of the business.
Because you're going to be putting your name with that business.
Correct.
Yes.
Correct. And we say, "Listen, you need to treat me like you treat your insurance guy or your doctor.

10:17
Okay.
You need to tell me what's wrong with this place.
Yes.
So that I know how serious it is, number one, or what's what how we can actually spin this.
Okay. Okay.
In the context of raising you the capital and make it easier for the
Yes.
deal to close. Let me call it a deal and not a transaction.
Mhm.
And make it easier for the deal to close, right? So, once we've done our you know, once we did our preliminary assessment and we come up with and then we start to look at the strategies and then we start to look at who in the universe is interested in this.
Mhm.
And it was fortunate at that time that the people who gave us the the leads were also people who had big networks.

10:58
Okay.
So, we actually also went to their networks and said, "Hey, in that manufacturing
Mhm.
that was raising 100 million that you mentioned.
Mhm.
Um we have this opportunity.
Okay.
Um and then that's the hard work because that's the where you you work the phones.
Yeah.
Um you you go to offices, you knock on doors, you get rejected, you come back. You understand what's wrong with your proposition. Hopefully you
Tweak it.
Tweak it. Hopefully you have a a client that's uh patient enough.
And I assume your advice to your client, now talking a bit between you as a financial advisor and who's going to help the client raise money. I think your advice includes it would be best to go for equity in this case or you can get debt in this case or you can get this type of debt with debt being a loan as the average a a Kenyan would understand it.

11:55
Yes. So that is part of what you do. 100%. So we we we talk the language of
Yes.
the investor. Whether it's the the the the the the
Both. The the the the the entrepreneur
money and then and the person You you you would even I I would I I dare say you're a translator, you know, in the sense that you take the dreams of the entrepreneur or the business owner and translate [clears throat] them into a language that the financiers, whether they be debt financiers or equity financiers can can
And and language is anecdotal. It's a It's the financial model. It's the information memorandum. It's the teaser. It's the you name it. So that's the the translation that that that we are putting across

12:46
Okay.
to private equity private offices, family offices, to banks, etc. Yeah.
So you It's a very interesting space because your your stock in trade is people.
100%.
You walk through people, you know, you have to be put together a team. You have to book together an So maybe walk us through how that journey is, particularly because when you start and you start getting some transactions under your belt, yeah? Your if your guys are as good as they are to close transactions, then they fall under the radar of the bigger boys who have deep pockets than you who can outbid you for your staff or can come
Yeah.
and pick your staff. So maybe let's talk about that journey of building a business of this kind.

13:39
Yeah.
Where you you you you invest in people, do you train them, you develop them, but you also have to shoulder the risk of them potentially
Yeah.
being cherry-picked. You know, I I I've had some of those experiences where you're working with someone and then next week he's gone because some big bank or some big investment bank or some big big four, you know, [clears throat] has come and
cherry-picked your guy from
So how was that journey for you at
It's still going on today, to be quite honest, right? So but the one thing that I I am very proud of is some of the people that I've worked with and they starting off as analysts um through the 16 years that we've been doing this

14:28
Yeah.
have become very influential themselves in in the industry, right? So it initially it was very painful because you've you've you've invested in in talent. They now can run without you actually, you know, minimal supervision and then uh you know, they give you that proverbial can we talk?
Yeah.
And and and then they end up end up leaving. So what we what we did in order to I'd say de-risk it, we never managed to completely do that is to just have a continuous pipeline
Okay.
of
talent
talent.
And and so we go to the business schools and we say whoever is looking has deep interest in finance um and whoever is looking for internship opportunities, bring them to us. And we want

15:21
the sharp guys
the top 10 or whatever it is. Whoever comes, it's fine. Um but that way we, you know, uh you de-risk it. And then we do whatever other employer does is we we kind of lengthened the the notice period. And um but in fairness, if they want to in fairness where they want to go, we always talk and we allow.
Okay.
Um but we have a we try not to have a very deep bench.
Yeah.
Yeah?
Okay.
Um and then we're very fortunate at a senior level um they've stayed with us for long.
Okay.
So, yes, we've had departures. And they're doing some serious things now. Um but uh to a large extent uh they've stayed with us for a long time.
Okay.
Yeah.
Okay. Now, you sit in a very unique space because you have a front row seat, yeah? To the buying and selling of business landscape in a regional context. Is that a fair assessment? So, you are probably best placed to sift the wheat from the chaff for us, you know, because um in the world of um let's say the African entrepreneur, yeah? There's a lot of sometimes bitterness, complaints, you know, people who look like us don't get money. It's very hard

16:47 for our businesses to raise money. Maybe my question to you is it Is it a lack of people who look like us being able to get money or is it more a failure of people who look like us understanding the language that the money wants to hear?
Wow, noted. Um I think [clears throat] we haven't quite understood the language
Mhm. that the money wants to hear.
Mhm.
Um Ohm's law
Yes.
Uh current follows the path of least resistance. Is that
Something It's something like that.
Something like that.
[laughter]
Something like that.
Yeah.
Uh-huh.
Money follows the path of least resistance.
Okay.
Right? And so, this is what people talk about and uh constantly uh harping on now is how prepared are you for the right journey, for the right feedback, for what you need to look like, and align your business to look like in order to attract that capital, right? Off the bat, we sometimes we get opportunities and the business is very, very attractive, but we go in there and we say you're just not. It's not It's not ready.

18:08
Mhm.
Um often people uh um are also misaligned in understanding the the attractiveness of the sector they're in, right? Because they're in it. You can't tell them any different, right? So, um uh if there are themes that are running in an in an economy, right? Um education, manufacturing, pharmacy, retail, brands, etc. If you don't fall in that, where are you getting the capital from?
Yeah.
Yeah? Because people have looked at um uh those economies. They've studied the trajectories, they've studied the underlying performance, and they said that's where I want to deploy.
Yeah.
Um so, I know So, if you were to run a query,
Mhm.
and there's no I'm not making casting any aspirations, I have hardly run into uh uh institutional investors inquiries.

19:10
Yes.
For example.
Yes.
So, I quickly will say I don't have experience in this particular sector, etc. But, are there things that you can do in order to make yourself the best-looking query
business.
Yes. Of course. And there's someone out there that is is is probably likely to invest in that. The other thing that I would say is once we go out with a teaser for your business lender, for example. And we speak to 20 people. And they tell us a few things. And out of 20, not a single one is looking. That's feedback. And some people take it out on us. That's fine, but that is feedback in its in in in and of itself. So, we often come back with that feedback to say, "Okay, this person said that." We don't name them sometimes, etc. But, you take that feedback and then also use that to actually improve. The other thing about this money is it's smart money. Right? Um so, it has a cost. The the capital that's investing now. It sounds obvious, right? But, it is really smart money. And it's impatient. Right? The the money that came when we first started, if you think about it,

20:33 that was um 2010, 2011 at that time. And that was at the when P firms and were being incorporated and bursting at the seams with capital, etc. It was very impatient. Right? So, we're here. We're investing. We are looking for 18% dollar IRRs. Uh the story is good, but are you ready?
Yes.
Are you ready to absorb that capital?
Yes.
Are you ready uh for the realities of what that investor and having them across your table involves, right? So, we often would be have a very good deal sometimes and then it falls apart with the guy says you you know, I'm coming to your board meetings. And you can't make a decision you can't make a decision above 2 million shillings above you know, without me. Whereas those things used to come naturally to you and

21:32 they were instinctive and they made you successful. Now, there's a process. Okay. So, those are the issues then. Yeah.
Many entrepreneurs out there and a lot of them that we have had on this podcast. Um entrepreneurs are fundamentally dreamers, yeah? So, um you touched on a topic that I want us to maybe go down that rabbit hole a bit. Everyone feels that they have a great idea, yeah? And all they need is money to execute it, yeah? And so, the focus becomes the money,
[clears throat]
yeah? But, I dare I say Kenya is now, I would say, mid-tier in terms of our relationship with institutional global institutional money cuz about the age that Horizon Africa Capital is is about the age of the uh private equity venture capital maybe slightly older, maybe give it another 4 years 20 20 years or so is when we saw that that the market being really active. So, we have now reached a stage where we are middle. You know,

22:33 we've we've seen good deals. We have seen bad deals. We have seen good deals go bad, you know? We have seen people start and they uh all hunky-dory, I'm giving you $2 million, $3 million, and that goes south. So, the market has become a bit more savvy, yeah? But, still we have this narrative out there with many entrepreneurs where they feel that the one thing they need is money and when they get money, yeah? They'll be fine. But, I really like the statement that you used that you say that money is smart, you know, because it it shows the value of the preparedness. And and maybe speak to what you're seeing in the evolution of the entrepreneur in terms of being ready to receive this money. Because it's not just money. The beginning when you if you try to simplify it, you will think it's just money, but it's not.

23:29
Yeah.
And and you also maybe speak to it from the perspective of the value of the professional services.
Yeah.
Because it's very easy in this day and age and this age of AI where you can craft anything for me to go and ask Claude to do a teaser for me and then go out into the market.
and pitch, yeah.
And and but let's speak to why is it important? Why do people like you exist and the others in your ecosystem? And what benefit are you to the entrepreneurs who want to raise funds? Why is it worth their time to have you by their side?
Um So as I answer that question, I'll probably think about a practical case that we had in Uganda many years back. Instinctively the entrepreneur there and she and she was in fast-moving consumer goods and still is um had run a good business. Um started from scratch. Um you know, bare knuckles built it from what from that point to the point at which she needed investment.

24:39
[snorts]
Um but the battle between I would need the investment and the conditions with it with which it comes is often an issue that we try and solve quite quickly. And so beyond the money, um, first of all, she was um, ex- and is extremely smart in that she said, "First take a look at my business."
Mhm.
Yeah? And tell me, "Where are my weaknesses and what do I need?" Right? And because I I I I also want to sit uh, from a governance point of view, from the right standpoint, "What do we need to fix?" So, we would then went and got other professionals to come in because I'm not a HR expert.
Mhm.
Neither am I uh, and this was a logistics business. Neither Neither do I uh, profess to understand logistics, um, as well. So, So, I said, "You spend some money and let's get two or three other professionals to come in and take a look at your IT systems cuz at the end of the day, um, you're going to have a lot of reporting to do. And that just means knowing where everything is at at at every every point in time." So, that took 6 months

25:54 out of the transaction time. So, at least, you know, there was an appreciation for that. Where it became uh, uh, interesting and then I realized that, "Hey, hang on a second. I think I'm starting to do a little bit more than churning out a model here."
Yes.
Is um, the calls come at any time.
You become a
From your client. Uh, I was thinking, "I met this guy. Do you want to meet? Can I Can Can you come to my office?" Um, So, you you You become a sounding board. I think that's the best um, That's what I describe what I do.
Mhm.
I'm a sounding board. But, I'm also very very clear. If I don't know, I don't know. Mhm. But, if I can find out, give me some time.
Mhm.
So, in terms of just the that day-to-day because it becomes now, "Hey, we are looking for money with you."

26:51
Mhm.
Yeah? You're in as invested as I am.
Mhm.
Um, that ability to be able to be available at one time is is is at any time is is is is um something that I I took for granted that that in the professional services and I think that was is what has distinguished us from from many.
Okay.
Um, is we are not necessarily just run by the clock.
Mhm.
And so, because of that we've had repeat we've had clients who've come back and back and come back to us quite a bit.
Mhm.
Um, but then when that money actually comes to the table and it presents you with a term sheet um, is when they start to appreciate hang on a second, the logistics guy I was thank God he came and he gave me a fleet management system.

27:41
Mhm.
Because uh otherwise I would be clueless as to what uh uh we are tracking here. Exactly.
Yes.
Um, if we are now going ahead to institute a board that now runs the affairs of the business
Yes.
we had already started having that conversation to say, "Look, you know, you need to have someone with some knowledge in finance."
Yes.
Maybe you might want a lawyer on board because you're fully contracting all the time etc.
Yes.
And so, there's that appreciation of that that comes across. Now, the value that the person with the money comes with
Mhm.
is the other interview that uh that that that that happens all the time. Because the question now that I see entrepreneurs and I'm going back to your question is the evolution is that now the entrepreneurs are yeah you've raised 10 billion shillings to invest in uh an infra- infrastructure business.

28:37
Mhm.
What value do you add versus Charles's versus Charles's infrastructure fund?
Mhm.
Where where do I see value for my business? So, that questioning has started to happen a lot.
Yes.
And in questioning that way, guess what happens?
Mhm.
The biggest successful deals are done by people who trust each other.
Agreed.
So, when I trust the value system that you're saying you're going to bring,
Yes.
right?
Yes.
The partnership is stronger.
Yes.
Yeah. It's professional, yes. But we do people with we do deals with people we like.
Yes.
I always say that.
Agreed.
If there's something off about somebody that's investing,
Agreed.
I won't do it.

29:23
Agreed.
Yeah.
Excellent. Now, let's come local. Kenya is a very interesting market because we have one a very old and entrenched cooperative movement. So, we have SACCOs which raise a lot of money and hold a lot of people's savings, yeah? Um we also have a very large and vibrant pension environment, yeah? So, there's there's lots of pension money sitting in Kenya, yeah? However, historically, despite all and our insurance sector, which which also collects premiums, and we have a vibrant insurance sector. Of course, it could be deeper, but it exists. And the companies are large enough to to be of repute and on record as being big business.
Yeah.
However, um this space of um private equity, venture capital, building businesses, acquiring for growth, scaling up, has largely, if we are honest, been built by money that comes from outside Kenya.

30:32
Yeah.
One, why do you think that is? Is it Is it more a question of time that And then will we will have the local what we call the local institutional capital will find its way this way to and and start investing cuz now if I'm to look at my space as restaurant in the restaurant business we are yet to see a large restaurant transaction with any form of local participation. Yeah. There are several that have happened and we can see that impact in the market by how they have grown. So why do you think that is and how do you think we can solve for that so that the benefit of doing these things also accrues to capital that is staying here and not necessarily early in the podcast we had Ken Jaroge. And Ken said one of the frustrating things about his building his largest business which is Cellulant is when it came time to reap the rewards a lot

31:38 of the reapers of the rewards were foreign.
Mhm.
And [clears throat] he wished that when he builds businesses in the in the future local can also participate. How do you see that happening?
The reward system is warped and I'm sorry. Uh I'll just say this but the reward system for people who manage pensions people uh who who run local funds etc. It's it's geared towards um rewarding for annual performance.
Mhm.
Which means that you you if you're talking about the reward system of building a Cellulant throughout Africa and I'm just using the same example you have.
Yes.
It means the rewards were being for that business the rewards were 7 years or 8 years later.
Yes.
When they were offloading the shares right?

32:32
Mhm.
We don't have that that system of rewarding um in the local uh I would say the local fund market isn't entrenched, right? S- [snorts] Secondly, is um uh the pension Right now, it's growing and it's growing rapidly because of obviously legislative change.
Yes.
Um and so the more money that's that's going in there I see a natural evolution
Mhm.
because it can't all be parked in uh in in government bonds.
Okay.
It can't. As an asset class, etc.
Or real estate.
Or real estate. And that's who And businesses suffered because um you know, people were building and selling, right? And they still are, right?
Yeah.
Saturation points are reaching, but that's another story. Now, when now finally if I'm an an an an asset a fund manager and I have 70 billion shillings right? And I I'm squeezed out of uh uh being able to invest in certain asset classes, I now start to look, "Okay, what else is on this table?"

33:47
Mhm.
Finally, you'll find private and I'm calling it private equity because it's just investing in private businesses.
Yes.
Not not the technical term that we've been speaking.
Yes.
Um that asset class will grow.
Mhm.
But it also has to be rewarded in a different
who set the benchmark um and it's the fund managers to advise their clients themselves is to say "We are going to do three or four deals in sectors that are fast growing
Yes.
in businesses that are cash generative
Yes.
but we are not taking dividends every year.
Yes.
We have to let the money compound in those businesses. Once if that catches momentum, then you will find that asset class growing.

34:40
[snorts]
The other thing and it is just is if I'm an analyst and I walk into an environment where we are analyzing bond performance and we are analyzing interest rates from banks or we are analyzing the returns on selling apartments or condos or whatever it is etc. The analysis of investing in a business is different. And so and even the appraiser right?
Yes.
has to have a certain skill. That skill set is still growing in those
in those institutions.
Okay.
Right?
Okay.
So the appraiser and the person doing the investment also have to get a good appreciation
Yes.
and be able to tell the story as well.
Okay.
But I think philosophically speaking, the more money that's raised through those, the more pressure to diversify.

35:41
Yes.
Ultimately, you'll start to see that investment
Agreed.
going across.
Okay. We uh we uh we spoke about circles, but I think if we take a step lower at circles, everyone in a Kenyan context is a member of some kind of chama. You know, you're all encouraged maybe boys come together, five, six, seven, eight of them or ladies come together, you know, and they form these groupings where they're contributing monthly. But as we are now getting older and along in years, you're now seeing some of these chamas have had some serious success. You know? [clears throat] Do you see a time now speaking to where we are going as a market? What's happening this landscape and you see the people who want to come into the market and want to come and engage invest. Do we see a time when the chamas that are now becoming quite large, when I say large above 50 million shillings in in assets that they own either real estate or cash and so on. Do

36:47 you see a time when they come to you and say hey Charles, look for us a business or businesses where we can participate. Do you see that as becoming a thing or has it started? Maybe it has and we in the in the general market don't quite have visibility of it.
I see it happening but it it will only happen with successful stories.
Chamas, right?
Okay.
Do you understand?
Yes.
So those people who are bonded together in a way and for long ultimately again will start to either from the outside when they are forming will be able to say this is our you know, we want to invest in businesses etc. Um but the main reason I see it not having grown as much is because they're not that many successful

37:42
Mhm.
There are many chamas.
Mhm.
But they're not that many successful chamas that have gotten sophisticated enough to say I want to invest in uh a business without at one point freaking out and or going back to the business and or interfering with the business etc.
Okay.
Where it's taking root is family offices.
Okay.
Yeah.
Okay.
So there are um uh uh people who have formed family offices and saying that Leonard has wealth. Uh Sam has wealth. Um if I go to Leonard and Sam and I say I'm a professional as Charles. Um, bring your some of your liquidity.
Mhm.
Right?
Mhm. [clears throat]
And I will begin to show you opportunities that you
might not see.

38:42
might not see.
in your day-to-day your day-to-day.
Yeah.
Right?
Yeah.
Um, there's some family offices that are purely big enough to run on their own. So, they have their own analysts and they have their own investment strategies, etc.
Mhm.
That's happening.
In Kenya now?
That's happening.
As we speak, yeah.
That's happening.
Okay.
In um In November of this year, there's a conference um, that's happening and I think for the first time they are they're congregating not only just the traditional um, private equity, but also family offices.
Nice.
Investors.
Nice.
Um, and um, we're really looking forward to that because it it will they'll kind of silent the surface, but they exist. So, um if the chama is visionary to be able to say we want to invest in private businesses um, and they have a way of evaluating whatever that is whatever that means.

39:43
Okay.
Whatever that means. We don't define it.
Okay.
Um, um, then you know, there's there's there's certainly room.
Mhm.
But it has been um, explored more by the the the family office structure now.
Okay.
Yeah.
That's those sound like exciting times. I mean, one of the things that excite me, you know, um, we've grown up on this continent. We studied here, yeah. And we we grew up with with I I call it an unfair bias to multinationals. Nothing against them, but we did not see African entities, yeah, that rose to the level of multinationals from a systems perspective, remuneration perspective, but we are now I'm really grateful to live in a time when I get to witness that, you know, when Dangote in Nigeria can put up a refinery, you know, and it's a world-class facility that's worthy of emulation and study, yeah. And it's wholly owned by an African. When he talks about stimulating African capital markets, you know, by using this asset. I think it's an interesting space for that. Now, let me take you to Horizon Africa Capital and its future, yeah?

41:04 Um you started as a small firm. Where are you now and where do you see yourselves going or where would you like to go in this future of this new emerging Africa?
So firstly, I want to say that we've been very fortunate because we've experienced some of those journeys with some of those investors.
Mhm.
Um and um uh if there's one thing I take away from the career that I've had over the last 16 years is it's being able to see what um some of that capital does and the change that it it it makes not only to those businesses but also to them to communities around them. Um so so for um Horizon um the reality is is we we set out to be slightly boutique in that we can't be all things to all people. Um and so the size of the team has remained the same

41:59 so we don't um the transactions um uh size may have gotten bigger etc. but that's that's a factor of where we wanted to play not anything else. Okay. Um we see the immediate future in becoming part of a larger organization. That's the reality. Um where advisory sits alongside other facets of the financial system.
Okay.
And um um hopefully we are working towards that uh that that that particular end goal. But um so in addition to serving the private side, we now want to serve the public side as well. Right? So um in a modest way, we want to uh uh be able to take companies public, uh be able to raise bonds from the uh uh public markets. Um be able to participate in um uh PPPs, be able to But we we have the realization that we might need ourselves

43:12 some investment.
Yes.
And uh uh
To play at that level
Yeah, to play at that level you you we might need to change in terms of what the DNA the DNA of the firm is. And so we are contemplating that.
What what excites me about what you're doing, Charlie, is uh is is not too dissimilar to what we have witnessed in Kenyan banks over the last two decades, I would say. Two decades is fair. Um because when I was growing up, when we were growing up, you know, the top three Kenyans the top three Kenyan banks in the Kenya of my youth were all foreign.
Yeah.
You know, absolutely.
Yeah. And uh fast forward today, and you know, the first foreign bank you see comes in at number four, five, you know, uh yeah, starts between four, five, and six. You know, the first top three are are local. And that really is exciting, and I think speaks to uh the opportunity, the magnitude of the opportunity. Let's Let's as we wind up speak about context. You know? Um and the fights that

44:20
If I can before you go there.
Please.
We need to stop pretending that we cannot do.
Agreed.
So that's So even Horizon
Yes.
is now saying we can do. And so there's a cake out there.
Yes.
Whatever the piece that we get.
Great question because it aligns with where I was going. Yeah. Let's speak as as a parting shot about context. And the power of local context. Um I've nothing against the Boston Consultings and McKinseys of this world, but my personal experience in my 30 30-odd years of my professional career has been that local context is the most undervalued asset. You know? So when a local when we have a large local corporate, yeah? And somehow the solution is thought to be found in a firm that probably doesn't even have boots on the ground here, and will bring an entire foreign team. I think what is lost is context and nuance. And I I I I have sat a bit frustrated as an entrepreneur when I've watched what I thought was um rather potentially good, great businesses shut down. And shut down out of no other reason but lack of local context, not a lack of capital. Capital was provided in large

45:52 amounts, but the goals and aspirations of the businesses were shifted by people who don't quite understand context. What has your experience, and am I right in saying that context of the local market has great value?
You know Leonard, you could put um And I I think I've said this to you before in the in in our professional dealings. I could put three people in my firm in one meeting with one entrepreneur and they hear three different things.
Yes.
They hear three different things.
Mhm.
And so one of the things that um uh uh it's hard to pass on but is the ability to understand what you're being told is the vision
Mhm.
by that entrepreneur.
Mhm.
And to And to understand what is important, motive. Because motive will then drive that context

46:49
Okay.
most of the time. And so I think that where uh we have done uh a decent job right? Is to be able to pick the phone at uh unfortunately at 10:00 p.m. Right? And that's uh I have an idea, right? Um to be able to say uh this this coffee should be packaged and look in this way and it can't because and it can't be done the way you're looking at it because of one, two, three, four things.
Yes.
So who better than to do that than somebody who's plugged into that particular market?
Lives and breathes it. Yeah.
And who uh uh and fair enough, you know, the the the firms that you talked about might have local offices, but those local offices must be empowered to say mhm culturally that's not going to work.

47:49
Mhm.
Um operationally it doesn't work because uh the mama mbogas arrive at 4:00 a.m.
Yes.
Uh and by 10:00 a.m. the money is back and stuff like that, right? And that's that's the the the the context. Those uh big banks that overtook they understood that context. And they had the same execution capacity as the others.
Yeah.
But they understood.
Yeah.
Yeah.
Wow, Charlie, what a fabulous It's amazing how time flies when the conversation is flowing like that. We you are 69th guest. And I I don't think I I say this lightly when I say this podcast has actually changed not only my life, but changed my thinking about this market. Because I've been absolutely blown away by the number of viable businesses that are investable. As a parting shot, I'll allow I'll give you a chance to speak to entrepreneurs

48:49 out there because they come in different shapes and sizes, yeah? About Horizon Africa Capital Limited, yeah? And how you can add value to them, yeah? And where they can find you on on your website and read more about you and how they can contact you because I think we're sitting at the precipice of something great in an African context. I had the privilege yesterday to actually visit one of our podcast guest's ranch, you know, um a Maasai lady called Reyna Andres, a beautiful episode. And I was absolutely blown away by what she's doing, not only for herself, but for her community in that context. I see you as and maybe we coined a word, but I see you as the translator. Able to translate the language of these entrepreneurs into the language of the money, be it local or foreign, such that we can actually push the pedal to the metal and grow these kind of

49:48 businesses into great institutions. So, maybe tell the audience where they can find you.
Yeah. And yeah. So thanks a lot Leonard again. I don't know if I have any wisdom for entrepreneurs, but you know, we Horizon has been an entrepreneurial journey as well. So I think that when you're timid and when you underestimate yourself, I think that's something that we we learned. The journey becomes unnecessarily long. And so yes, dream. But the the the thing that we probably helped do is to connect the dots between the reality and that dream.
Yes.
Right? And so what we've always tried to do is to have an an excellence of service that can actually serve that purpose. In in in many ways I I think I can compete with whoever doing this service in East Africa and maybe even in Africa. I I think we can. Um but it is the ability at the end of the day for me to be useful. So I have to be useful to the entrepreneur. And at the end of the day that then ensures that the journey is actually aligned.

51:13
Yeah.
We are based out of Westlands. Horizon Africa Capital www.horizonafracacapital.com.
Okay.
Um the there's an interesting path to evolution that I can't speak about, but will be happening soon.
Excellent.
And for me it's it's been a pleasure to serve, but also because I enjoy it, it's it's it's easier.
Okay.
Yeah.
[clears throat]
Excellent. Wow. Ladies and gentlemen and and and entrepreneurs out there and business owners, business builders, dreamers. Uh that was Charles O Manga of Horizon Africa Capital Limited. Um interesting. I've had the privilege of working with them and I can speak to their quality and output of work. And um like Charles said, I think this is our continent. We should not be timid about it. We do deserve We do not deserve. We have a seat at the table. We

52:10 just have to take it. And we have seen 69 uh entrepreneurs come and sit on this chair and speak about what they're doing and we'll continue to bring them to you. In the meantime, also look for them when their services align with what you're doing or would help you align better with what you're doing in this in in this in this instant of Horizon Africa financial structuring, uh capital raising, debt raising, and all the financial things that are required in a growing business and in an ambitious business. That was the episode 69 of the African Loop podcast. It was a pleasure having you with us. Please do subscribe to our channel on YouTube and watch the episodes both past past and present. Thank you very much.