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Cytonn set to enter unit trusts market with Seriani takeover

Cytonn CEO Edwin Dande. FILE PHOTO | NMG
Cytonn CEO Edwin Dande. FILE PHOTO | NMG 

Cytonn Asset Managers is expected to enter the unit trusts market in 30 days, following a 100 per cent acquisition of city-based Seriani Asset Managers.

In March, Capital Markets Authority (CMA) granted a fund manager’s licence that does not include unit trust management to Cytonn Asset Managers—a subsidiary of Cytonn Investments Management—after one-and-a-half year wait.

Cytonn Investments chief executive Edwin Dande yesterday said the main reason for the acquisition is to fast-track entry into the Sh57 billion unit trust fund market, with intention of doing it within 30 days as opposed to 90 days.

“After receiving the fund manager’s licence, the next step was to apply for a collective investment scheme licence to be able to offer money market fund, equity fund and balanced fund. That process can take up to three months. Luckily, we came across Seriani, a player in the market who was looking for somebody with a bigger balance sheet,” said Mr Dande.

“At that point we agreed on a 100 per cent acquisition, but also agreed that we are not going to disclose the transaction price.”

Mr Dande added that Cytonn had also applied for exemptions to the Competition Authority of Kenya (CAK) given the size of the transaction, as it is below what CAK would be concerned with.

He expects the CMA to review the transaction and give them a feedback within 30 days.

According to CMA’s regulations, when a firm acquires a fund manager, they have 30 days to respond.

Seriani Asset Managers was incorporated in 2015 and was licensed as a fund manager by the CMA in June 2016.

It has three collective investment schemes – Seriani money market fund, Seriani equity fund, and Seriani balanced fund.

Cytonn Asset Managers was incorporated in August 2016 and expects to attract resources from high-net worth investors and pension schemes to real estate and private equity, which offer higher returns than bonds or equities.

A fund manager is an administrator of a collective investment scheme or mutual funds—such as a unit trust, registered venture capital company or an investment adviser--who manages a portfolio of securities in excess of an amount prescribed by the authority from time to time.