Alternative investment firm Cytonn has set its sights on mopping up Ksh.30 billion worth of investor funds through its launch its first regulated high yield fund.
The scheme which follows requisite approval and subsequent exemption by the Capital Markets Authority (CMA) is expected to see the company place up to 80 percent of acquired funds in real estate to fund both ongoing and prospective projects in the future.
Cytonn has backed the fund on its higher offer to participants with the expected yield on investments sitting at maximum 15 percent and well above the financial sector-single digit average return.
The fund is expected to take war at the door step of commercial banks with a minimum initial investment of Ksh.1,000,000 and a shortened initial lock in period of three months.
“Unlike banks who largely put their funds in fixed income, we are the ones with shovels on the ground working for a return to our investors,” Cytonn Chief Executive Officer Edwin Dande told Citizen Digital.
The Ksh.30 billion in target assets under management are expected to be reined in over a period of five to seven years with proceeds going towards the targeted construction of 6,000 housing units under the State’s affordable housing plan.
The launch of the fund follows easier leveraging of investor funds directly negating the need for the firm to go through the customary bank channels.
“It has been relatively easier to tap for funds directly as opposed to going through banking sector intermediaries,” Dande said in a November interview
The company’s whose capital structure is majorly made up of shareholder funds is further on the verge of raising a further Ksh.2 billion via a real estate investment trust (REIT) which pends regulatory approval to shove up its capital expenditure base.
Nevertheless, the firm has partly diversified away from the pure investor funding having taken out a Ksh.650 million facility from the State Bank of Mauritius (SBM) earlier in the year.
From its above market average return to investors, Cytonn continues to appraise its attraction to potential investors as an offeror of alternative investment solutions.
Presently, the firm holds over Ksh.82 billion worth of investments and projects under mandate with the significant portfolio sitting in real estate
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