Real estate-focused private equity firm Cytonn says it has to wait another month to know whether the regulator will grant it a licence applied for a year ago to set up a fund management unit.
Cytonn on Tuesday said it expects feedback from the Capital Markets Authority (CMA) in a month.
“We met with CMA recently and they wanted to understand the company better, and they requested one month,” said Maurice Oduor, investment manager at Cytonn.
The proposed Cytonn Asset Managers will be headed by Mr Oduor, the firm said. Cytonn disclosed its application in September 2016.
The requisite share capital for fund managers licence is Sh10 million. Applicants pay a Sh2,500 application fee and CMA timelines provide a turnaround time of 25 working days for applicants.
The CMA declined to comment on the matter, citing confidentiality clauses.
“The application has been under consideration and once a final determination has been made, we will communicate with the company and the public. It is also noteworthy that applications made to the authority are confidential, thus we are not in a position to discuss details of the same,” the Paul Muthaura-led CMA said.
In December 2016 Cytonn said it had complied with all the CMA requirements and was awaiting feedback.
“We submitted all the documents that were required by CMA for licensing and also responded to the questions that the authority had and we are just waiting to hear from them,” Mr Oduor said in an earlier interview.
The fund management unit will help attract resources from high net-worth investors and pension schemes to real estate and private equity, which offer higher returns than bonds, equities, and fixed income, the firm said.
The proposed fund manager will not affect the holding company’s other unregulated activities such as venture capital, real estate and cash management, the PE firm said. A CMA circular dated August 22, 2016 ordered asset managers to stop offering cash management products — the practice of handling cash for wealthy clients at a fee — hitting the bottom line of most players who depended on this product for earnings.
A fund manager handles collective investment scheme (such as a unit trust), registered venture capital company or an investment adviser.