Cytonn Investments, a leading alternative investments company, has today announced that Cytonn Asset Managers Limited (CAML), its regulated affiliate, has been granted a Real Estate Investment Trust (REIT) Manager License by the Capital Markets Authority (CMA). This is a further positive step for Cytonn Asset Managers, having been recently granted a license to manage retirement benefit schemes funds by the Retirement Benefits Authority (RBA) in December 2018.
CAML becomes the ninth Kenyan fund manager to be granted a REIT Manager License by CMA. Having the REIT Manager license will allow CAML to register their own REIT products, which include Development REIT’s and Income REIT’s, allowing them to access a pool of investor capital that wishes to take specific real estate exposure. REIT’s source funds to build or acquire real estate assets, which they sell to generate development returns, or rent to generate income. The income generated is then distributed to the shareholders at the end of a financial year.
Additionally, CMA consented for CAML to proceed and register a number of Unit Trust Funds, the Cytonn Africa Financial Services Fund, Cytonn USD Money Market Fund and Cytonn High Yield Fund. This is a very important milestones for the firm because it marks the beginning of transitioning the Kshs. 11 billion Cytonn High Yield Solutions (CHYS) portfolio, from a private product to a regulated product managed by CAML.
“Kenya’s real estate market has seen exponential growth over the years, and consistently delivered attractive returns to investors. However, a key challenge facing the real estate sector is access to financing away from the traditional sources of funding, which include bank funding. Financing structures such as REIT’s and real estate backed funds such as high yield fund, offer a capital markets based solution to raising funds towards real estate development, and also a chance for eligible investors to invest and gain attractive yields, capital appreciation and above-average total returns” said Mr. Maurice Oduor, Principal Officer, Cytonn Asset Managers, on receiving the REIT Manager License.
Deepening of the capital markets remains a key priority for Cytonn Asset Managers and the REIT Managers license is another positive step forward towards regulated product development.
“This is an important milestone for CAML because it allows us to bring investment grade real estate offerings to a wider pull of clients through regulated capital markets vehicles. This will be the first real estate backed high yield fund in the market and it demonstrates that our capital markets are open to innovation” said Mr. Edwin Dande, Chief Executive Officer, Cytonn Investments.
