Cytonn is a private equity firm, formed in 2014 and is based in Kenya, the largest economy in the East African Community It is headed by a team of young professionals with local expertise and a wide network of overseas contacts. The firm has, during the first two years of existence, established a subsidiary in the United States (Cytonn Diaspora), to cater to Kenyans who live overseas. Among its other subsidiaries is
Cytonn Cooperative Savings Society and
Cytonn Real Estate Investments Limited,
a subsidiary dedicated solely to investing in real estate.
As at 31
December 2015, the firm's total assets were KES:6.5 billion (USD:65
million)
.
In September 2016, the company applied to the Capital Markets Authority
of Kenya to establish a subsidiary wholly and solely dedicated to wealth management.
Cytonn Investments released their first-half 2017 unaudited results
for the group, delivering strong growth with revenue growing by 140.4%
to Kshs 638.8 mn from Kshs 265.8 mn for first-half 2016, and group
earnings more than quadrupled, growing by 415.9%, to Kshs. 299.2 million
from Kshs. 58.0 million.
Below is the full statement obtained from
Cytonn Investments Website
The strong growth in revenues and
earnings was driven by a 36.7% growth in their real estate deal
pipeline, from Kshs 60.0 bn as at H1’2016 to Kshs 82.0 bn as at H1’2017,
coupled with strong sales of real estate developments. Balance sheet
growth was also robust, with total assets growing by 24.5%, from Kshs
11.8 bn as at FY’2016 to Kshs 14.7 bn as at H1’2017.
The growth in total
assets was driven by (i) an increase of 216.3% in Quoted Private Equity
and Active Strategy Investments, from Kshs 0.3 bn as at FY’2016 to Kshs
1.0 bn as at H1’2017, and (ii) an increase of 15.9% in investment
property, from Kshs 10.1 bn as FY’2016 to Kshs 11.7 bn as at H1’2017.
“Our
strategy in 2017 remains growth in the firm across our four key pillars
of people, products, processes and distribution, to position ourselves
to consistently deliver on the attractive alternative investment
opportunities, which exist in Kenya and the region,” said Edwin H.
Dande, Cytonn’s Chief Executive Officer. “While the market was
distracted in the first half of 2017, and with low valuations in the
market, we have remained focused as a firm and built our investment
portfolio, in both real estate and quoted private equity. In real
estate, through coupling up real estate finance and real estate
development onto one platform, we have carved up a niche with almost no
competitor; we also managed to pick up several prime parcels of land at
very attractive prices in the first half of the year. In financial
services, we have taken advantage of the low market valuations to build
strategic stakes in listed entities, the largest being KCB Group where
we bought aggressively in February 2016 when the stock dipped to a low
of Kshs 23.0 per share; it has now recovered to almost doubling to Kshs
45.0 per share, allowing us to book very attractive gains and have built
our position to the 5
th largest local institutional investor” added Edwin.
“In
a year when the macroeconomic environment was challenging, and the
economy faced uncertainties due to the General Elections, our investors
have so far realized excellent returns of (i) 21.2% p.a. in the Real
Estate Development Portfolio driven by our investments in prime real
estate developments in locations with compelling demographics, (ii)
58.2% p.a. in the Quoted Private Equity Portfolio driven mainly by
increasing exposure to the undervalued financial services sector, and
(iii) 18.0% p.a. in the Privately Placed Commercial Paper Portfolio.
More importantly, with our adherence to strong corporate governance
structures, our clients can be confident that their interests come first
at all times,” said Elizabeth N. Nkukuu, CFA, Cytonn’s Chief Investment
Officer and Head of Real Estate. “We continue to develop institutional
grade real estate, aimed at reducing the housing deficit, estimated at
200,000 units annually. Cytonn’s real estate platform, with a strong
focus on execution and delivery of quality real estate products, has a
total investment portfolio of 10 developments, valued at Kshs 82 bn.
With over 1,200 acres under development, combined with a strong private
equity deal pipeline, evidenced by the purchase of a 25.0% stake in
Superior Homes Kenya, we are confident in continuing to deliver superior
returns to investors. All of our investments continue to address the
housing shortage, create employment opportunities, with over 1,000 jobs
having been created to date, help in deepening of the capital markets,
and play a part in the growth of our economy,” added Elizabeth.
“We
are proud to be able to continue to present strong financial results.
We continue to make heavy investments in real estate, with a 15.9%
increase in our investment property portfolio, from Kshs 10.1 bn as at
FY’2016 to Kshs 11.7 bn as at H1’2017. Driven by our live real estate
developments, revenue increased by 140.4% from Kshs 265.8 mn for H1’2016
to Kshs 638.8 mn for H1’2017. The investment property in the
development pipeline of Kshs 11.7 bn had gains of Kshs 430.3 mn in
H1’2017, which together with revenue growth of 140.4% highlights the
attractive investment opportunity in real estate in Kenya and the
region,” said Shiv Arora, Cytonn’s Financial Controller. “Group
accounting profit came in at Kshs 299.2 mn, with economic profit of Kshs
346.9 mn after removing one-off provisions. This resulted in growth of
shareholder equity of 7.7% from Kshs 5.3 bn in FY’2016 to Kshs 5.7 bn in
H1’2017,” added Shiv Arora.
“For our shareholders and joint
venture partners, 2017 is shaping up to be a great year, as can be seen
by our financial performance. Cytonn has delivered great numbers, and
management has continued to execute a growth strategy that will propel
us to be the leading alternative investment firm in Africa,” said Prof.
Daniel Mugendi, Cytonn’s Chairman. “While others have slowed down, we
have continued investing heavily in growth of our people,
products, processes and distribution. With the continued attractive
investment opportunity in Kenya and the region, combined with a
committed team at Cytonn, we shall continue to contribute to growing
Kenya, creating jobs for Kenyans, and improving the standards of living
across the country.” added Prof. Mugendi.
.jpeg)
.jpeg)
