Fusion Capital is an international investment business, originating in the United Kingdom, and primarily focused on the countries of the East African Community, including Kenya, Rwanda, and Uganda. It is a financier and developer of commercial and residential real estate, including retail malls, office blocks, mixed-use developments, logistics, and housing. Through its regulated subsidiary, Fusion Investment Management Limited, also manages capital and assets on behalf of other investors, including the Kenya Ports Authority Pension Scheme, Taaleri Real Estate, and other institutional and private investors.
Fusion Capital was founded in 2006 by Phil Goodwin, a UK investor with experience in the European Private Equity industry. It’s first CEO was Luke Kinoti, who left the company in 2016.
- Type – Private limited company
- Industry – Real Estate and Financial Services
- Founded – 2006
- Founder – Phil Goodwin
- Headquarters – Nairobi, Kenya, and Manchester, UK
- Number of locations – 5
- Area served – East Africa, including Kenya, Rwanda, Uganda, and Mauritius
- Key people – Phil Goodwin, Daniel Kamau, Michael Kimondo, James Maclean
Assets – Undisclosed
Early History – 2006 to 2010
Fusion Capital began in 2006 as a provider of working capital to Small and Medium Sized Enterprises (‘SMEs’) in Kenya. The company’s mission was to bridge the funding gap between small traders, who were often financed by Microfinance providers, and fully-fledged SMEs, who had been able to establish banking relationships. From its base in Nairobi, the company offered medium-term loans to companies with ambition and commitment to a growth plan. Over 350 of these investments were made between 2006 and 2010, supporting SMEs directly and creating significant social impact in employment and wealth creation.
During this time Fusion Capital partnered with MyC4, the Danish Microfinance crowd-funding platform, becoming one of the platform’s best-performing lenders in the region.
The company gradually modified its approach, providing larger loans to more substantial businesses, and also equity finance. With the focus on identifying partners who understood and would accept a style of equity partnership that had been successful in Europe and the United States of America (USA), but was quite nascent in the African context. Notable Equity investments included: Ushindi Feeds in Nakuru, San Valencia, Thika Farmers in Thika, Popular Tastes Industries, Julimatt Enterprises, Laikipia Springs, and Gal Baking.
Later History – 2010 to 2020
In 2010, Fusion moved into real estate development with a focus on the needs of SMEs and their workforce. The rationale was that SMEs and their owners could best be served by building decent, affordable business premises and dwellings. In the same year, Fusion provided its first financing for a real estate development. This was a loan and minority equity participation for office development in the Upper Hill area of Nairobi – the building now known as 4th Ngong Avenue Towers. Working with a landowner partner, Fusion managed the planning and construction process. At the same time, it provided finance for a residential development of 60 houses in the Athi River area of Nairobi known as Graceland Athi River, again working with a partner.
These first developments provided a solid and encouraging learning experience for the Fusion team and led to a steady expansion in both the commercial and residential markets. Fusion recruited as Advisory Directors a number of senior figures to help develop this side of the business, including the distinguished economist Paul Collier and EBRD Director Michele Small. The company soon had built Flamingo Towers, another significant office development in Nairobi located between the British High Commission and the Japanese Embassy, and begun work on a master-planned 500 -home community in Ruiru, just north of Nairobi. These were followed by developments in Nakuru, Mombasa, Meru, and several more in Nairobi. In December 2016, Fusion completed a major development in Rwanda, Kigali Heights, comprising more than 330,000 sq ft of prestige office and retail space. This building was voted Africa’s best mixed-use development in 2017 by East Africa Property Investment Summit (EAPI). The company also completed a mixed-use development in Kampala, Uganda. Its major effort in Uganda, though, did not get off the ground because of planning and infrastructure issues – it was to be a significant ‘new town’ development near Kampala, but the project was mothballed in 2015.
As buildings were developed, the need to manage them arose and Fusion began the activity which became Fusion Estate Management – the business of letting, selling, collecting rents, and building repair and maintenance.
In parallel with these developments, Fusion built a funding arm in 2013, known as Fusion Investment Management Limited, which approached the Capital Markets Authority in Kenya and became a CMA-regulated fund manager in January 2013. Fusion began broadening its investor base from the original UK-based backers.
In 2016 Luke Kinoti stepped down as CEO and was replaced by Daniel Kamau. Daniel joined the business as its second employee in 2006.
In 2019 Phil Goodwin led a buy-out of key shareholders resulting in the company taking direct ownership of a number of long-term assets.
Recent Developments 2020 to 2022
Fusion has become more focused on residential developments in recent years. The company has been critical of the loose planning controls which have allowed, for example, Nairobi to significantly over-develop its office and mall capacity, such that it is difficult for any market players to make an economic return. The residential property represents a surer bet, as demographic trends and urbanization in Africa will, on any forecast, drive demand far in excess of supply for many years to come.
Fusion today is focused on three main activities:
- Large-scale peri-urban residential developments in East Africa – Galaxy Gardens a 450 mixed-use housing estate in Ruiru Kiambu, Success Gardens a 285 housing estate on Gatanga Road in Muranga County, Wema Gardens phase one comprised of 380 planned development in Laikipia and Wema Gardens Phase two comprising of 600 planned units amongst others.
- Affordable housing in East Africa; Fusion’s mission is to provide individuals and families in East Africa with genuinely affordable rented accommodation which is: Decent, safe, and compliant with building standards; Conveniently located; Built at a price that allows investors and lenders to invest for an economic return.
- Fund management; mainly focused on real estate development, Wealth Management, and Retirement Benefit Schemes. As well as its core territory of East Africa.
Fusion has recently launched a venture centered on residential and logistics in Ukraine and surrounding countries.
Environmental, Social and Governance (ESG) Investing
Fusion was formed in 2006 with explicitly ethical objectives. Whilst the methodology from the start was a business methodology, the objectives were to do with the development of Kenya and surrounding countries and the creation of opportunities for individuals. Goodwin’s vision was to create a business that would give people in difficult parts of the world the opportunity to build something of their own.
All of Fusion’s developments are mindful of environmental considerations, and as well as complying with all local rules, they include wherever possible:
- Water recycling
- Solar power
- Energy-efficient construction methods
- High standards of fire life safety
- Provision for disabled people
- Safety features for women residents and other vulnerable groups
- High safety standards during construction
Fusion provides equal opportunities for all staff to develop, regardless of race, religion, or gender, and provides health insurance, a pension, and training opportunities. During the Covid 19 pandemic, staff worked from home, and the flexibility to work from home has been permanently adopted.
Fusion is governed by a Board of Directors for each principal company, including independent Non-Executive Directors. Board meetings are regular and minuted. The accounts are audited by major international firms. Fusion reviews its counterparties regularly and neither it nor its senior officers have any political affiliations or complications.
Fusion has a zero-tolerance policy towards corruption and has twice received The Ethical Leadership Award by the Ethical Leadership Network in Kenya, awarded for honesty and avoidance of corrupt practices.
Fusion is funded entirely by private individuals and institutions based in the UK, Europe, the US, and the East African countries it serves.