Faq's

Question

Faqs

Q

I would like to invest in Kenya but I’m not sure of the methods to use or how to begin.

First, determine your immediate needs because investment should have a long term or short term horizon. 

Once you are certain of how much you want to invest and know your goals, begin with liquid investments such as fixed placements and regular investment solutions. These provide a constant stream of supplementary income. Our Regular Investment Solutions (RIS) and Cash Management Solutions (CMS) can fill that need.

Q

I would like to invest with my US/Foreign bank account. Do you allow that?

For your convenience, you are also able to transact with Cytonn through our US based bank account. 

Additionally, you are also able to remit funds to our custodial accounts through a SWIFT transfer. There are also other licensed money remittance services that allow you to send funds to us for a low fee.

For the EU, UK and Switzerland services such as EquityDirect allow you to remit funds to both bank accounts and M-PESA

Q

Is Cytonn Diaspora only focused on the US market?

All our products and solutions are suitable for Kenyans in the Diaspora, regardless of their location. Our pool of clients hails from West Africa, the US, Canada, Europe, Asia and Australia.

Q

Can I invest with my group?

Our investment solutions are suitable for both individuals and registered/ unregistered groups. However, in addition to individual requirements, we also require a resolution mandate from group members authorizing the investment and at least three signatories to the account

Q

What are the bank account details for both the US and Kenya accounts?

Interested clients can request our bank details by sending an email to diaspora@cytonn.com 

Q

Where are your US Offices Located?

Our US offices are located at 6411 Ivy Lane, Ste 112, Greenbelt MD 20220 in the DC Metro area. Please feel free to call in on us

Q

What else do I need to invest with Cytonn Diaspora?

A KRA Pin number, an official copy of your ID & Passport and proof of address and bank details are the requisite documents

Q

What long term investment options are available for Kenyans in the Diaspora?

Consider longer term alternative solutions such as real estate. Land and property has been an attractive investment due to the expansion of population in urban areas. The average return has been about 25% for the past 5 years. Ask to visit a unit so you can get a feel for the neighbourhood and how secure it is. Next, evaluate how close the project is to amenities like schools, hospitals, retail centers and public transport. All these factors influence the value you’re getting in the area. Our project at Ruaka (The Alma) meets all the above needs. Visit Cytonn Diaspora for details.

Q

Is it a hassle to withdraw your investment away from Cytonn at the end of my investment period? 

No. Our operations team is dedicated to processing client withdrawals in record time. We typically process withdrawal requests and issue bank instructions to transfer funds within 24 hours of receiving the withdrawal request. Funds are typically dispatched to the client’s bank account in 3 business days. Transit times may vary depending on the client’s bank

Q

Is there a concern that there will be a bust in the real estate market in Kenya due to oversupply?

There are currently no concerns of a bust in the Kenyan real estate market due to oversupply. The increase in prices is anchored by a large deficit of supply, especially in low and middle class housing. Official reports from the National Housing Corporation estimate the deficit at 200,000 urban housing units annually. More than 70% of this deficit is located in Nairobi. The trend in prices is supported by the scarcity in affordable housing finance. Statistics currently state that only 20,000 Kenyans are able to afford a mortgage at current rates (14-18%). There are currently only 20,000 mortgage accounts representing 3.4% of Kenya’s GDP

This is in contrast to the US market where housing supply and demand is anchored primarily by the availability of financing and the prevailing interest rate climate. The run in US home prices between 2005 and 2008 was caused by a decline in rates and increasingly lax mortgage lending abetted by an institutional finance system with flawed incentives.

Q

How many real estate complexes have you completed so far and how many sold so far?

 

All our developments are currently selling on an off-plan basis. The Alma, our project in Ruaka, was 40% sold before groundbreaking and is currently 50% sold. Amara Ridge, our first project, is near completion in 2017 and is currently 80% sold. In addition, key management have worked together for more than 5 years and our project management team consists of experts with more than 20 years in the real estate industry

 

Q

If I were to invest in real estate right now, does it mean that there are no final products to make comparison to?

While our projects are currently selling on an off plan basis, the work done by our developers is still available for viewing. Our developers include CATIC/AVIC, the lead contractor for the UAP tower in Upper Hill (Nairobi’s tallest tower) and Landmark Construction Limited, builders of the Kenya Civil Aviation Authority building near JKIA

Q

Why has it taken too long to have any finished products yet you have been in business for two years?

All our projects are currently running on schedule. However, unforeseeable circumstances could lead to the extension of construction time and are not limited to, the weather and other issues. The start of construction activity is also delayed by contractor mobilization on site

Q

Who are Cytonn’s largest funders?

Our largest funding partner is Taaleritedas Oyj, a NASDAQ-OMX listed Investment Management firm headquartered in Helsinki, Finland with US$ 5 Billion in assets under management. Cytonn has secured US$ 30 million in funding commitments from Taaleritedas

Q

When getting into joint ventures with landowners how do you settle on the partners and how do you do you mitigate all the risks involved?

In the typical joint venture, the partners are the landowners and the developer, Cytonn Real Estate. The joint venture is governed by a board of directors with representation from Cytonn Real Estate and the landowners. We also encourage landowners to seek independent legal counsel to represent their interests on the board of directors and to conduct thorough due diligence review on any counterparties

To mitigate risk, a decision to proceed with the project is made at every stage of the project. Landowners, as shareholders in the venture, have input in the crucial steps of the process from origination and site acquisition, viability assessments, pre-development, development and exit.

Q

What do I need to secure a mortgage for your projects?

Mortgage requirements and specifications vary according to the lender. However, the following documents are required by most lenders offering diaspora mortgages: ID or passport; Valid VISA & Work Permit; current copies of a pay-slip or proof of income; KRA PIN; certified copies of your bank statements; utility bills and letters of reference from an employer attesting to your income. Other requirements are an official valuation, property insurance and title deed. Cytonn Diaspora also maintains partnerships with local banks for clients who require a mortgage solution. Please contact the team for a referral to our partner banks

Q

Can I sell Cytonn products here in the diaspora?

 

We welcome your interest in selling Cytonn diaspora solutions. Please register your interest in being an Independent Financial Advisor (IFA) on our website and someone from the team will get back to you. All applications are subject to due diligence and review by our legal team. Please contact us for more information

Q

What is the status of the stocks market in Kenya? Is it a good time to sell or buy?

Our research team publishes a weekly analysis of the Kenyan stock market with equity recommendations. The team also publishes specific/topical research on specific sectors. Please navigate to www.cytonnreport.com to subscribe to our report or http://www.cytonn.com/research/investments to view our most current research

Q

Do you offer B2B investment options?

All our investment and real estate solutions are suitable for both individuals, businesses and groups, either registered or unregistered

Q

Does the new interest rate caps law in Kenya affect the interest rate on Cytonn Investments?

 

We do not currently foresee that the Banking Act, 2016 will have an effect on the interest rate on Cytonn Investments products. While we have not announced a revision in the rates of our investments products, we plan to maintain current rates of return for the near future. The amendment could actually favour Cytonn as we can now competitively price our deposit placements with banks

Q

With the interest rates cap, the demand for houses will go down due to a drop in the supply of loans and mortgages. What guarantee do you have for investors that they will earn the forecasted return on your housing investments?

In comparison to the US market, the supply of mortgages in Kenya is not a factor driving the increase in home prices. This is due to the low uptake of mortgage finance (only 20,000 households can afford mortgages at current rates). Please view our research on the effect of the interest rates cap here. Alternatively, Cytonn offers well-structured payment plans that give investors flexibility and affordability when it comes to home ownership

Q

Is the money invested insured?

The money invested is backed by the corporate guarantee of Cytonn Investments Management (K) Limited. 

Other legal protections include the ring-fencing of the Cytonn Cash Management Solutions LLP from all other Cytonn businesses and Cytonn assets. Investor funds are also governed under an Investment Policy Statement executed with Standard Chartered Bank Kenya, the Custodian

Q

Is it a requirement to declare any withdrawal amount above 1 million (KES) to the US government?

The US Treasury, through the Office of the Comptroller of the Currency (OCC), a bureau of the US Federal Reserve, requires that any cash withdrawals in excess of US$ 10,000 (KES 1,000,000) are reported in a Currency Transaction Report (CTR). This is not your responsibility, but that of the bank through which you conduct the cash withdrawal. The filing of a CTR itself is no indication of suspicious activity.

The US Federal Reserve, through the Financial Crimes Enforcement Network (FinCEN), also requires that any offshore accounts with an account balance greater than $10,000 (KES 1,000,000) at any time during the calendar year report the amounts in the Report of Foreign Bank and Financial Accounts (FBAR). This is in addition to the annual IRS tax filing (Form 1040)

Q

If I roll over my investment at the end of the investment period, am I still charged the withholding tax?

No withholding tax is charged on the occasion of a roll-over or top up investment. Withholding tax is only charged when interest is paid out

Q

Do I get to choose where my money is invested (or the manager decides for me)?

We take the hassle out of investing. Our team of investment researchers and managers is responsible for identifying the investment opportunities and executing them.

Q

Do you have the option to invest in US dollars?

Clients have the option of investing in US Dollars or Kenya Shillings. However, different rates apply to US Dollar denominated investments

Q

From the perspective of an investor why would I choose to invest in you?

We differentiate ourselves by our unique focus on the diaspora market. No other firm maintains an office in Washington, DC that is staffed by captive Cytonn staff. No other firm also has dedicated Diaspora financial advisors to respond to client inquiries and leads around the clock. Our products are tailored to fit an individual/institutions specific needs and we have a large team of financial advisors to assist you around the clock

Q

How do you make yourselves transparent?

We are one of the very few Kenyan private firms to publicly release their full year audited financial statements and remain available to answer any questions or queries around the clock.

Clients of the firm are also welcome to view specific audited financial statements related to some of our products. We have also voluntarily instituted policies and procedures that safeguard client assets such as the ring-fencing of client funds from Cytonn’s funds and operations and the segregation of all client investments in separate legal structures such that any changes in our business environment or risks facing us do not lead to adverse losses in client funds. We believe in high levels of corporate governance and we endeavor to achieve this at all times

Q

Who are Cytonn’s largest funders?

Our largest funding partner is Taaleri Oyj, a NASDAQ-OMX listed Investment Management firm headquartered in Helsinki, Finland with US$ 5 Billion in assets under management. Cytonn has secured US$ 30 million in funding commitments from Taaleritedas


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