Markets & Finance

Cytonn real estate fund seeks Sh10bn


Cytonn chief executive Edwin Dande. PHOTO | FILE

Cytonn Investments Management plans to raise Sh10 billion equity from global and institutional investors through its real-property fund.

Apart from the Cytonn Real Estate Fund (CREF) capital, the firm says it intends to raise an additional Sh40 billion from pension funds, debt and banks. Up to Sh10 billion of this would come from pensions while the other Sh30 billion is debt in form of bonds and bank credit.

Cytonn CEO Edwin Dande said the company has already raised Sh2 billion out of the Sh10 billion equity target.

“In the CREF targeting global and institutional investors, we are planning to raise Sh10 billion. It is a continuous process and we have already raised Sh2 billion. We expect that we will complete the process by the end of the year,” said Mr Dande.

The first Cytonn real-estate project will be a gated residential community in Karen, Nairobi. It will be developed through its affiliate Cytonn Real Estate —set to be launched formally on Wednesday.

Cytonn is also expected to unveil its other projects at the function.

The firm said it realised the best way to carry out real-estate projects is to have a complete value chain with a developer, fund management arm and land.

“You need a lot of money to do real-estate projects. And the best way to go about it is to have a complete value chain and that is what we have gone for,” said Mr Dande.

Cytonn Investments Management is a brainchild of breakaway staff of British American Asset Management (BAAM) who opted to venture out on their own last year.

BAAM was involved in property deals with Acorn that were taken over by Cytonn ending in litigation. However, Mr Dande confirmed, Cytonn decided to keep off the deals and launch Cytonn Real Estate to push its own.

READ: Former Britam staff take Sh40bn real estate deal

Cytonn Investments Management recently appointed several directors in its board as it gears up for major projects. Mr Dande said the firm looked for people with passion, skills and deep networks both regionally and in global markets.

He said the firm needed the right people to ensure investor confidence. A director Antti-Jussi Ahveninen, for instance, is a real-estate funds specialist whom he said had managed 12 international institutional real-estate funds.

He currently heads the international real-estate funds operation of Finland-based Taaleritehdas Private Equity Funds. Taaleritehdas Oyj, a company listed on Nasdaq and has over Sh390 billion ($4 billion) under management.

He also sits on the boards of TT Africa Real Estate (Mauritius), Liberty Real Estate (Mozambique) and Kigali Heights Development Company (Rwanda).

Daniel Mugendi, currently the principal of Embu University College, was appointed chairman. Madhav Bhalla is a founding partner at the law firm of Taibjee and Bhalla which handles litigation and commercial law.

Mr Bhalla specialises in real-estate conveyancing and property law, but has nearly two decades of experience in transactional and commercial work, corporate advisory, banking, employment law, commercial and civil litigation.