Been a very rough day, but here we are… Very impressed with the Cytonn Investments team. We managed to put our real estate funds under administration in the interest of investors and simultaneously ensured that our regulated liquidity fund, Cytonn Money Market Fund, CMMF remained liquid and operating normally. Just dial *809# to invest or withdraw anytime 24 / 7.
Following the onset of Covid 19, real estate funds around the globe, including our own real estate fund, CHYS, became illiquid because there were more investors wanting to pull out than put in funds during such uncertain times. Consequently, the Board of Investors, pursuant to the Investment Agreement, extended fund maturities to alleviate the liquidity strain and give time for the fund to recover… nothing surprising there.
Unfortunately, the extension of maturity led to new risks that we have had to address:
First, the extension led to vicious litigation from a few investors trying to put themselves ahead of other investors, with some even threatening and or filing liquidation petitions if not given preferential treatment. Pooled funds require equal treatment of all investors. To manage this risk and give the fund an opportunity to recover, the Board of Investors resolved and instructed management to file for administration to ensure all investors are treated equally and the fund has the enabling environment to restructure.
Second and even most damaging was the sustained negative publicity driven and actively promoted by two rambunctious members of CMA management led by the CEO Mr. Shamiah, who went on blogs, TV and newspapers, shouting fire!, ostensibly to distance himself from a fund whose structure he approved in writing and name we co-created.
We have since filed defamation proceedings in court, filed a petition for removal with parliament and wrote a complaint to CMA Board against the CEO, who should be providing leadership and stability in markets, not injecting chaos and turbulence into markets.
I highly regret that the illiquidity risk in CHYS has come to crystallize, and with the benefit of hindsight, our real estate strategy should have been less aggressive. Luckily all our assets remain in very attractive locations and our banking partners remain supportive. Together with the management team, the board and now the competent court appointed administrator, I am doing everything humanly possible to ensure that the real estate portfolio is restructured to the benefit of all investors.
All our other funds remain operational and you can dial *809# to invest or withdraw anytime, 24 / 7.