CMA Warns Against Using Unregistered Investment and Fund Management Firms

Unregistered Investment and Fund Management Firms

Edwin H. Dande - Chief Executive Officer at Cytonn Investments speaking during the Investments Analysts and Investors Open Day.

The Capital Markets Authority (CMA) of Kenya, has warned investors against engaging with unlicensed firms offering fund management and investment advisory services trading.

This follows enquiries received by the Authority regarding the licensing status of the Cytonn Investment Group.

CMA Acting Chief Executive, Mr Wyckliffe Shamiah, said, “The only licensed entity is Cytonn Asset Management Limited, which is licensed as a Fund Manager and a Real Estate Investment Trust (REIT) Manager.”

 The funds managed by the entity under the approved Collective Investment Schemes are; Cytonn Money Market Fund; Cytonn Balanced Fund; Cytonn Equity Fund; Cytonn Africa Financial Services Fund; Cytonn Money Market Fund (USD); and Cytonn High Yield Fund.

“Investors are advised to check correctly the names of the licensed and approved entities,” added Shamiah.

Shamiah advised investors to confirm the licensing status of any firms offering services in the capital markets industry with the Authority since it has been noted that some of unlicensed and unapproved entities are pitching investment opportunities as if they are licensed.

Inquiries emerged on allegations that Cytonn Investments Management Plc had extended the maturity date of its Cytonn High Yield Solutions, (CHYS)by 90 days.

However, in a statement, the company said,  “We have not blocked investors from pulling out their cash from our real estate funds… However,  Kindly note that CHYS is governed by investors, who voted to have funds reinvested under a 90-day extension.”

The firm said its products Cytonn High Yield Solutions, (CHYS) and Cytonn Project Notes, (CPN) are unregulated real estate funds and are  governed by a Board of Investors as result of the Covid-19 pandemic, they have witnessed “Reduced construction activity, closure of lands offices and slowed purchase of real estate units”

“Consequently, investors of the fund through their Board of Investors, in consultation with the Principal Partner, passed a resolution ( binding to all investors) extending all maturities by 90-days; 90 days is a period within which we expect the sites to reopen,” said Edwin H. Dande, Chief Executive Officer, Cytonn Investments Management Plc.

READ

It added that its other products such as the Cytonn Money Market Fund is operational and one can invest, withdraw and redeem to pay bills instantly 24/7.

“Approximately 80% of the Cytonn Money market Fund is invested in Cash, Deposits and Government Instruments, hence the fund is extremely liquid, hence the lower return of 11% p.a compared to our other funds,” Edwin H. Dande, Chief Executive Officer, Cytonn Investments Management Plc said in a clarification statement on the allegations.

Regulated Fund Managers in Kenya

ICEA Lion Asset Management Limited

Madison Investment Managers Limited

Old Mutual Investment Group Limited

Old Mutual Investment Services (K) Limited

Nabo Capital Limited

CIC Asset Management Limited

Co-op Trust Investment Services Limited

FCB Capital Limited

Fusion Investment Management Limited

Alpha Africa Asset Managers

Amana Capital Limited

Apollo Asset Management Company Limited

Britam Asset Managers (Kenya) Limited

Metropolitan Cannon Asset Managers Limited

GenAfrica Asset Managers Limited

Sanlam Investments East Africa Limited

Standard Chartered Investment Services Limited

Stanlib Kenya Limited

Zimele Asset Management Company Limited

Natbank Trustee and Investment Services Limited

Allan Gray (Kenya) Limited

Cytonn Asset Managers Limited

Altree Capital Kenya Limited

Jubilee Financial Services Limited

Quantec Asset Managers Limited