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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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KenyanEconomist wrote:Mainat wrote:@kenyaneconomist - kwani which economics do you do? This is the banking model...they borrow short from you and other rich depositors and lend long KenyanEconomist wrote:moneydust wrote:quicksand wrote:[quote=Horton][quote=Mainat]Not defending Cytonn, but how many understand how they are able to offer their rates profitably? How many have visited Amara Ridge or even the Ruaka project? This thing stinks..if you are not an insider just keep off.No point in losing your life savings just because you want an average return on your investment.The risks far outweigh the returns. The fact that they are relying on CMS to fund their projects, instead of structured long term financing from reputable financial institutions, and the fact that their rates are still those of the pre-interest capping days raises alot of red flags. Good point on the funding. I think that is the biggest risk here. They are funding long term projects with short term (max 1 yr) money. If deposits continue to grow then they are fine and will deliver. However, if CMS deposits are redeemed en masse, while cash is tied up in long term projects, then they would be in a serious cash crunch. @Mainat, isn't that why banks are regulated by CBK? (Cytonn is not regulated). And isn't that why Banks are well capitalized? (Cytonn investors have only put max 48m of cash into the business for an asset base of 11bn as at Oct 2016, if you ignore unrealized fair value gains). Most banks also have more of voluntary deposits, that are not chasing high interest yields like Fixed Deposit or CMS investors... Weren't Chase and Imperial regulated? Wasnt Chase and Imperial "well capitalized"? May I suggest the need to read up on "Private Equity" and how they are capitalized and how they are funded?! What I do always find amusing about this particular thread is that whenever this topic becomes active "a new-farer" comes and makes comments and accusations before disappearing. Only for the next new farer to come along. It was a Paul muchiri first then Alma then some economist 😁😁
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Rank: New-farer Joined: 5/7/2014 Posts: 40
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Horton wrote:KenyanEconomist wrote:Mainat wrote:@kenyaneconomist - kwani which economics do you do? This is the banking model...they borrow short from you and other rich depositors and lend long KenyanEconomist wrote:moneydust wrote:quicksand wrote:[quote=Horton][quote=Mainat]Not defending Cytonn, but how many understand how they are able to offer their rates profitably? How many have visited Amara Ridge or even the Ruaka project? This thing stinks..if you are not an insider just keep off.No point in losing your life savings just because you want an average return on your investment.The risks far outweigh the returns. The fact that they are relying on CMS to fund their projects, instead of structured long term financing from reputable financial institutions, and the fact that their rates are still those of the pre-interest capping days raises alot of red flags. Good point on the funding. I think that is the biggest risk here. They are funding long term projects with short term (max 1 yr) money. If deposits continue to grow then they are fine and will deliver. However, if CMS deposits are redeemed en masse, while cash is tied up in long term projects, then they would be in a serious cash crunch. @Mainat, isn't that why banks are regulated by CBK? (Cytonn is not regulated). And isn't that why Banks are well capitalized? (Cytonn investors have only put max 48m of cash into the business for an asset base of 11bn as at Oct 2016, if you ignore unrealized fair value gains). Most banks also have more of voluntary deposits, that are not chasing high interest yields like Fixed Deposit or CMS investors... Weren't Chase and Imperial regulated? Wasnt Chase and Imperial "well capitalized"? May I suggest the need to read up on "Private Equity" and how they are capitalized and how they are funded?! What I do always find amusing about this particular thread is that whenever this topic becomes active "a new-farer" comes and makes comments and accusations before disappearing. Only for the next new farer to come along. It was a Paul muchiri first then Alma then some economist 😁😁 @Horton, no need for ad hominem arguments. If you have a problem with my point of view, then let's discuss. But my "New-farer"status has nothing to do with this topic. One could say Cytonn itself is a "New-farer" (Founded in 2014, when I joined Wazua, Lol), does that mean it has no substance? Regarding regulation, I was making the point to @Mainat that if he claims Cytonn's funding model is similar to banks, then perhaps they should be regulated as a bank, with capital/Risk Assets and liquidity restrictions. And yes, Chase and Imperial went under receivership, but do you honestly believe their depositors would have been safer in an unregulated environment? Not sure where the Private Equity model comes in to this discussion. Private Equity is funded by long term capital (+10 yr commitments by Limited Partners such as DFI's, Pension Funds etc) to invest in long term investments. Perhaps you can give me an example of a PE fund which is funded by short term funding?
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Rank: User Joined: 8/15/2013 Posts: 13,236 Location: Vacuum
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Let me try to clear the perception or lack of information exhibited above 1. Cytonns CMS and Fixed income notes are NOT used to fund their projects. Even if Cytonn was to go under, your investment will remain intact as all the funds are held in a custodial account with Stanchart. 2.ONLY Real estate solutions investments-different from CMS and FIN- are used for Real estate projects. If Obiero did it, Who Am I?
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Rank: Member Joined: 12/17/2013 Posts: 118
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Swenani wrote:Let me try to clear the perception or lack of information exhibited above
1. Cytonns CMS and Fixed income notes are NOT used to fund their projects. Even if Cytonn was to go under, your investment will remain intact as all the funds are held in a custodial account with Stanchart.
2.ONLY Real estate solutions investments-different from CMS and FIN- are used for Real estate projects. Nothing can be further from the truth. If they are going under they lose the money first. Holding money in a different account gives no security as long as you are not the account signatory. KCB,NMG,PAFR
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Rank: User Joined: 8/15/2013 Posts: 13,236 Location: Vacuum
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yosie14 wrote:Swenani wrote:Let me try to clear the perception or lack of information exhibited above
1. Cytonns CMS and Fixed income notes are NOT used to fund their projects. Even if Cytonn was to go under, your investment will remain intact as all the funds are held in a custodial account with Stanchart.
2.ONLY Real estate solutions investments-different from CMS and FIN- are used for Real estate projects. Nothing can be further from the truth. If they are going under they lose the money first. Holding money in a different account gives no security as long as you are not the account signatory. Cytonn are not a signatory to the custodial account If Obiero did it, Who Am I?
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Rank: New-farer Joined: 5/7/2014 Posts: 40
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Swenani wrote:yosie14 wrote:Swenani wrote:Let me try to clear the perception or lack of information exhibited above
1. Cytonns CMS and Fixed income notes are NOT used to fund their projects. Even if Cytonn was to go under, your investment will remain intact as all the funds are held in a custodial account with Stanchart.
2.ONLY Real estate solutions investments-different from CMS and FIN- are used for Real estate projects. Nothing can be further from the truth. If they are going under they lose the money first. Holding money in a different account gives no security as long as you are not the account signatory. Cytonn are not a signatory to the custodial account @Swenani, thanks for the clarification. However, it's difficult to believe that the CMS cash sits safely in a custodial account, and is still able to earn 18% returns. @Horton had a more plausible explanation, that part of the fund are indeed invested Real Estate as well as CP's to earn the blended return of +18%. From @Horton: "They have a spread of how they invest. Mainly real estate and CPs. CEO has admitted making a minimum of 25% to be able to pay the 18%"
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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KenyanEconomist wrote:Swenani wrote:yosie14 wrote:Swenani wrote:Let me try to clear the perception or lack of information exhibited above
1. Cytonns CMS and Fixed income notes are NOT used to fund their projects. Even if Cytonn was to go under, your investment will remain intact as all the funds are held in a custodial account with Stanchart.
2.ONLY Real estate solutions investments-different from CMS and FIN- are used for Real estate projects. Nothing can be further from the truth. If they are going under they lose the money first. Holding money in a different account gives no security as long as you are not the account signatory. Cytonn are not a signatory to the custodial account @Swenani, thanks for the clarification. However, it's difficult to believe that the CMS cash sits safely in a custodial account, and is still able to earn 18% returns. @Horton had a more plausible explanation, that part of the fund are indeed invested Real Estate as well as CP's to earn the blended return of +18%. From @Horton: "They have a spread of how they invest. Mainly real estate and CPs. CEO has admitted making a minimum of 25% to be able to pay the 18%" My thinking exactly.Even if Cytonn are not signatory.They must be giving instructions as to where to channel the funds..similar to pension funds.Someone gives instructions on whom the custodian should pay,whenever such a need arises? If these funds are not being channeled to real estate,then where are they being channeled to.In another forum I had joked that maybe the older CMS providers invest with Cytonn where they get the 18% and then pay investors 12%..
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Rank: User Joined: 8/15/2013 Posts: 13,236 Location: Vacuum
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Chaka wrote:KenyanEconomist wrote:Swenani wrote:yosie14 wrote:Swenani wrote:Let me try to clear the perception or lack of information exhibited above
1. Cytonns CMS and Fixed income notes are NOT used to fund their projects. Even if Cytonn was to go under, your investment will remain intact as all the funds are held in a custodial account with Stanchart.
2.ONLY Real estate solutions investments-different from CMS and FIN- are used for Real estate projects. Nothing can be further from the truth. If they are going under they lose the money first. Holding money in a different account gives no security as long as you are not the account signatory. Cytonn are not a signatory to the custodial account @Swenani, thanks for the clarification. However, it's difficult to believe that the CMS cash sits safely in a custodial account, and is still able to earn 18% returns. @Horton had a more plausible explanation, that part of the fund are indeed invested Real Estate as well as CP's to earn the blended return of +18%. From @Horton: "They have a spread of how they invest. Mainly real estate and CPs. CEO has admitted making a minimum of 25% to be able to pay the 18%" My thinking exactly.Even if Cytonn are not signatory.They must be giving instructions as to where to channel the funds..similar to pension funds.Someone gives instructions on whom the custodian should pay,whenever such a need arises? If these funds are not being channeled to real estate,then where are they being channeled to.In another forum I had joked that maybe the older CMS providers invest with Cytonn where they get the 18% and then pay investors 12%.. @Kenyaneconomist, did I say the funds sit in a custodial account? All the payments and deposits are made through the account. @Chaka, Correct cytonns CMS is similar to pension funds operating model management of funds. The real real estate investments earn more than the 18% Quote:The Cytonn Cash Management Solutions (Cytonn CMS) investment solution is a restricted private offer as defined in Regulation 21 of the Capital Markets (Securities) (Public Offers, Listings and Disclosures) Regulations, 2002; the offering is a private offer and is therefore not subject to approval by the Capital Markets Authority.
The Cytonn CMS is offered, as a separate standalone limited liability partnership, the Cytonn Cash Management Solutions, LLP, with Standard Chartered Bank Kenya Limited as the Custodian and the product is backed by the corporate guarantee of Cytonn Investments Management Limited, the main Cytonn group Company and also the Principal Partner to Cytonn CMS. The entity is audited by Grant Thornton Kenya.
An investment in to the Cytonn CMS is governed by the following documents:
i. The Contribution Agreement, which sets out the detailed terms and conditions of the investment;
ii. The Partnership Deed, which is the main governing document;
iii. The Investment Policy Statement, which guides the investment mandate and the types of investments that the Principal Partner can make.
If in any doubt about the contents of this Partnership Deed or the nature of this private offer, or the risks attached to Cytonn CMS, one should consult a person who specializes in advising on structured and private offers and structured investment solutions. If Obiero did it, Who Am I?
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Rank: Elder Joined: 10/18/2008 Posts: 3,434 Location: Kerugoya
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Swenani wrote:Quote:The Cytonn Cash Management Solutions (Cytonn CMS) investment solution is a restricted private offer as defined in Regulation 21 of the Capital Markets (Securities) (Public Offers, Listings and Disclosures) Regulations, 2002; the offering is a private offer and is therefore not subject to approval by the Capital Markets Authority.
The Cytonn CMS is offered, as a separate standalone limited liability partnership, the Cytonn Cash Management Solutions, LLP, with Standard Chartered Bank Kenya Limited as the Custodian and the product is backed by the corporate guarantee of Cytonn Investments Management Limited, the main Cytonn group Company and also the Principal Partner to Cytonn CMS.
The entity is audited by Grant Thornton Kenya.
An investment in to the Cytonn CMS is governed by the following documents:
i. The Contribution Agreement, which sets out the detailed terms and conditions of the investment;
ii. The Partnership Deed, which is the main governing document;
iii. The Investment Policy Statement, which guides the investment mandate and the types of investments that the Principal Partner can make.
If in any doubt about the contents of this Partnership Deed or the nature of this private offer, or the risks attached to Cytonn CMS, one should consult a person who specializes in advising on structured and private offers and structured investment solutions. Where is the LIKE button when you need it? AA would be a fool not to give you a kiss for this.
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Structured ponzi. Business opportunities are like buses,there's always another one coming
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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KulaRaha wrote:Structured ponzi.
Gosh some guys think this is Facebook ama twirra giving us status updates
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Rank: Member Joined: 1/19/2016 Posts: 204
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Rank: Elder Joined: 12/7/2012 Posts: 11,901
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paulkimani wrote:https://www.capitalfm.co.ke/business/2017/03/cytonn-profits-drop-by-82pc-as-investment-projects-triple/ Okay. GL all  In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Elder Joined: 6/23/2009 Posts: 13,475 Location: nairobi
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Angelica _ann wrote:paulkimani wrote:https://www.capitalfm.co.ke/business/2017/03/cytonn-profits-drop-by-82pc-as-investment-projects-triple/ Okay. GL all I smell a big fat rat
HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
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Rank: Member Joined: 12/1/2007 Posts: 538 Location: Nakuru
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So do the 18% returns continue or will be revised downwards? For investors as a whole, returns decrease as motion increases ~ WB
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Rank: Elder Joined: 12/7/2012 Posts: 11,901
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winmak wrote:So do the 18% returns continue or will be revised downwards? First in, first out doesnt apply only to goods and stores  In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Elder Joined: 4/30/2008 Posts: 6,029
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paulkimani wrote:https://www.capitalfm.co.ke/business/2017/03/cytonn-profits-drop-by-82pc-as-investment-projects-triple/ When I read the author is a graduate in Communications from a theological college...I didn't bother with the article
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Horton wrote:KulaRaha wrote:Structured ponzi.
Gosh some guys think this is Facebook ama twirra giving us status updates A ponzi is a ponzi. Business opportunities are like buses,there's always another one coming
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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KulaRaha wrote:Horton wrote:KulaRaha wrote:Structured ponzi.
Gosh some guys think this is Facebook ama twirra giving us status updates A ponzi is a ponzi. Get a new oneliner....this one is kinda getting boring
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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paulkimani wrote:https://www.capitalfm.co.ke/business/2017/03/cytonn-profits-drop-by-82pc-as-investment-projects-triple/ Haha there he comes from the cracks again. Why dont i see u commenting on any other post on this website?
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