Investing in Cytonn: In 2014, a team of four young professionals joined hands and launched Cytonn Investments, a private equity firm. The four professionals, Edwin Dande, Shiv Arora, Elizabeth Nkukuu, and Patricia Wanjama, were venturing into a field they were well acquainted with, but whose dynamics they wanted to transform.
Ironically, the four Cytonn founders had quit employment to venture into the real estate sector at a time when other medium real estate firms such as Home Afrika were facing difficulties to operate despite being listed on the Nairobi Securities Exchange. This, though, did not deter the founders from taking the big jump.
Within a few months, their venture’s assets had surpassed the Sh. 1 billion mark, and by the end of 2015, they were managing assets worth Sh. 6.5 billion. With their growing portfolio, in September 2016, Cytonn applied to the Capital markets Authority (CMA) for a license to create a wealth management subsidiary.
“We quickly discovered that the best way for us would be to diversify our products. We focused on high yield, private equity and real estate,” says Cytonn in a statement to Bizna Kenya. “For example, under real estate, we evaluate, structure, and deliver real estate investments products such as real estate investments, real estate backed fixed income notes, and rent stabilized investment units.”
In April this year, the investment firm announced that it was considering listing on the Nairobi Securities Exchange’s Growth and Enterprise Market Segment (GEMS) by introduction. At the time, Cytonn was already handling projects worth over Sh. 82 billion under its real estate investment arm. “The move to list on the NSE, will not only provide Cytonn with additional financing channels, but will also provide resources for growth and expansion as well as enhance its visibility and credibility,” says Emmanuel Wafula, a financial markets expert based in Nairobi.
Over the past four years Cytonn, has pulled off some of the most prominent infrastructural developments in the country. Currently, the firm has 10 ongoing residential and commercial projects that are valued at over Sh. 80 billion. These include the multi-billion Amara Ridge in Karen, The Alma in Ruaka, and the Sh. 12 billion mixed-use development, The Ridge, located in Nairobi’s Ridgeways area. Cytonn is also undertaking a serviced-apartment development of its own in Westlands to complement similar homes in Ridgeways. More furnished apartments are also under development at the 35-floor Cytonn Towers in Kilimani.
The firm has also ventured into the securities market. In May, the firm under its subsidiary Cytonn Asset Managers acquired 100 per cent shareholding of Seriani Asset Managers in a bid to enter the unit trust fund market which is valued at Sh. 57 billion.
This came hot on the heels of the acquisition of 7.5 million shares of NIC Bank worth sh. 256 million and 689,655 shares of HF Group worth Sh. 6.9 million. Currently, Cytonn is the fifth largest shareholder at NIC Bank. This, though, was not the first time that Cytonn was making such moves on the NSE. In February 2017, Cytonn bought KCB shares and later sold them off at a profit. “We bought a big stake in KCB which we have sold, earning a return of about 80 per cent,” says Mr. Dande, who is the company CEO.