Cytonn Asset Managers Limited (CAML), the regulated affiliate of Cytonn Investments, has launched Cytonn High Yield Fund (CHYF), an investment scheme aimed at financing mid to low income housing.
CHYF will target assets under management of Ksh30 billion, which shall be used for the development of 6,000 mid to low-income houses.
CHYF is a product regulated by the Capital Markets Authority (CMA) and targets to offer returns of up to 15 percent, according to the company. The minimum initial investment for the fund will be Ksh1,000,000, with an initial lock-in period of three months, after which investors can access all or part of their capital.
80 percent of the funds will be used in real estate development, making Cytonn the first firm to be allowed by the Capital Markets Authority to use over 25 percent of investment funds in one asset class.
“When we sat down with the regulator (CMA), they saw the viability of the plan and gave a go ahead, making it the first of the kind in Kenya,” said Cytonn CEO Edwin Dande.
Cytonn last yeah launched the retirement scheme, a year after the National Treasury repealed investment cap that was placed in 2000.
In the new rule famously know as table G of the Retirement Benefits Authority, retirement schemes were permitted to sink a maximum of 30 percent of their portfolio into listed income-earning real estate securities.
There are now 14 investment classes in the amended table up from the previous 10.
Speaking during the event, Principal Secretary, State Department for Housing and Urban Development Mr Charles Hinga said that the government is targeting Nairobi’s Eastlands in the affordable housing agenda.
The estate, has at least 17,000 housing units of colonial design, but the number has increased to 43,000 following encroachment from informal settlements.
However, the government, through PS Hinga, seemed to distance itself from the implementation of the affordable housing agenda, saying that it is the duty of the private sector to implement it.
“Article 42 and 43 of the constitution entail what I call the social justice rights. However, there still lacks a structure on how to fulfill the rights. Alternatives such as the private sector should chip in to help the situation,” said Hinga.
According to article 43(1)(b) of the constitution, every person has the right to accessible and adequate housing, and to reasonable standards of sanitation, which is not the case in Kenya, especially in most parts of urban areas.
For instance, it is estimated that at least 500,000 people move to urban areas every year, leading to more slums due to lack of adequate affordable houses.