Kestrel Capital exits fund management

The Nairobi Securities Exchange electronic trading screen (PHOTO: FILE)

Investment firm Kestrel Capital East Africa is shutting down its fund management business in a move that will see one of the most prolific names at the Nairobi Securities Exchange bow out.

In a Kenya Gazette notice on Friday, the Capital Markets Authority (CMA) said Kestrel Capital had notified it of the decision that would take effect on February 8 unless any objections are raised. 

“It is notified for general information that the licensee appearing in the schedule hereinafter have notified the Capital Markets Authority of their intention to cease operation of their investment bank activities and the authority has accepted the request for revocation of their license,” said the notice dated December 23, 2020. 

“The licensee shall continue operating as a stockbroker as licensed by the Capital Markets Authority.”

Kestrel Capital was licensed as an investment bank in 2014 allowing the firm to advise on offers of securities to the public, takeovers, mergers, acquisitions and corporate restructurings of listed companies.

Over the years, the firm has taken on several high-profile transactions valued at billions of shillings in volumes, making it one of the most sought-after investment advisors at the Nairobi bourse. 

Kestrel has been the lead transaction adviser to several firms issuing shares at the NSE, including Deacons Kenya, Kenya Airways, ARM Cement, Housing Finance, Diamond Trust Bank, DTB, CMC Motors and Access Kenya. 

In 2019, CMA launched investigations into the firm regarding reports of insider trading on KenolKobil shares in the run-up to the takeover of the oil marketing firm by Rubis Energie of France. 

CMA investigators found 14 accounts had bought a total of 62.7 million shares valued at Sh938.3 million with potential illegal gains amounting to Sh503 million.

The regulator said majority of the accounts frozen due to the irregular trading were done through Kestrel Capital.    

As a result, the CMA board initiated enforcement proceedings against then Kestrel CEO Andre DeSimone and the firm’s stock brokerage agents, Aly Khan Satchu and Kunal Bid.

CMA says members of the public who might have any outstanding issues with the fund manager should notify the authority on the same within 45 days from the date of publication of the notice.

“In line with the requirements of section 27 of the Capital Markets Act, upon the lapse of the 45 days and no notification to the authority on any outstanding issues, the licences shall stand revoked,” said the CMA in the notice.