1 . Could you comment on the real estate sector in terms of the significant glut you see in the market and its impact on Cytonn Investment ’ s returns in the next two years ?

R : Kenya is a growing economy if you look at the core pillars of growth - whether its macro-economic stability , inflation , exchange rate - interest rates are more stable than they have ever been . If you look at just over ten to fifteen years at demographics , it is a young and growing population around 2 percent per annum . The rate of urbanization is even higher at around 4 per cent per annum . If you look at government indices , admittedly , we still have our own issues but look at Kenya today versus ten or fifteen years ago , it has never been more stable , with elections every five years .

Taking into consideration ease of doing business - we have always led in terms of this index . There is heavy investment in infrastructure to enable long-term economic growth . From the macroeconomic perspective , the country ’ s governance of doing business and investment in infrastructure all feed into higher economic growth which is noticeable . Kenya ’ s GDP has been 5 to 7 percent consistently over the past few years and likely to remain so in the foreseeable future . Of course in a growing economy you have to house people coming to urban centers , especially those at the bottom of the pyramid and you have to house businesses . From a real estate perspective what we see is enduring demand and constrained supply . Current data indicate that there is a deficit of two million houses and growing by 200,000 every year . We do not see housing as a glut , but pockets of oversupply . For example , for office blocks in Upperhill there is an oversupply so of course you will see rental prices coming down , yields coming down , zero to little capital appreciation and you would notice a huge drop in rental yields or rental price . We do not see the glut , but rather what we do see is lack of institutional grade ability to acquire good land , put good concepts and sell to clients in a way that clients can trust .

2 . Would you say the Nairobi Securities Exchange ( NSE ) is a good indicator of Kenya ’ s economy ?

R : Over the past year , the NSE has dropped approximately 25 percent if not more . I would not say it is a good indicator . It is one of the data points used to measure the country ’ s economic viability . If you really want to understand the health of an economy you have to go back to the fundamentals : what are the key growth drivers ? It is possible the economy can still be growing and the stock market be falling as equity prices were too frothy . I am not sure there is a strong correlation between the performance of the

market and the performance of the underlying economy . What one is currently seeing is a re-pricing . The valuations are going up . We are still a population where there is limited amount of information that is why we put out a lot of research to try and inform the market . We are no different from others ; when there is a hard mentality towards an asset class like equities , everybody will go into equities ; when people decide to pull out everyone else pulls out . Also there is something unique about the Kenya bank failures - Chase and Imperial -- that brought shock into the market . I don ’ t think the stock market is an indicator of what is happening in the underlying economy . If you want to look at the underlying economy look at GDP growth and the underlying growth drivers . For any investor with a long term view it is time to invest in the stock market that is why Cytonn has moved from a zero shareholder in KCB today to the 14th largest shareholder of KCB because we see tremendous value in the bank alone .

There are many underpriced equities at the moment . What most people have to do is to look at the fundamentals of the company , and make educated decisions on which equities to purchase . What happened with the bank failures was a setback to the entire financial services sector , which in turn did impact the NSE , albeit negatively , but it was not the sole cause of the decline across the board .

3 . You have growing credentials as an American training investment banker . How does your experience in diversified financial services and your stint on Wall Street contribute to your founding and managing Cytonn ?

R : People always ascribe me to founding Cytonn . It is a team of five people who saw the opportunity in the real estate and alternative asset management arena that came together . Of course my experience on Wall Street helped me quite a bit . Wall Street is very fast paced , results - oriented , detailed , and analytical , and of course there is no better place in the world to learn finance and investments . It is the financial capital of the world so it makes it easy to have been part of events like the global financial crisis having worked for the Bank of America , Lehman Brothers , Meryll Lynch and then been able to come back and partner with people with deep local experience and networks . When one takes global skill sets , the ability to execute deals , local networks and relevance one brings into a group , the aim is for the group to produce something others can ’ t compete with . That is why our products do very well , whether it is in our real estate sector or our structured products like cash management solutions . Technology and expertise help , of course , but the most important ingredient is being culturally sensitive and setting the right tone for execution . We try to draw much from past lessons and experiences . You have to deliver to the client what you promised , and you have to demonstrate to them that your

deal has no errors . This has helped particularly with demonstrating our work ethic and approach to execution .

4 . Did those networks assist you in raising the necessary funds in your initial investments ?

R : Our initial investment came from a company called Taaleri of Finland , which manages over USD 5Bn . They were attracted to the real estate return opportunities in this country . If one looks at the data available , most people park money in equities , fixed income securities , and bank deposits , which collectively have returned 10 to 12 percent over the last five to six years . Private equity , especially in the real estate sector has returned 20 to 25 per cent . In Europe , one would be lucky enough to attain a 1 % return on one ’ s investments . Essentially this is a key reason Taaleri and other PE shops and investors look at . When Taaleri came in , they sought to work with a team they could trust and one which was focused on results . That was our way of operating and having a team together with precise execution . Investment is about a team with good people . Sophisticated investors are always going to want to see who is on your team ; how you make decisions and “ how do I know I can trust you ?”

5 . Besides your Finnish partners , do you have other challenges in fund-raising abroad

R : No . Upon receiving funding from Taaleri , we created a product called Cytonn Cash Management Solutions and we have also created another one called Cytonn Project Notes and other types of instruments to raise funds . Between Taaleri funding us , and other investors coming on board , we had more than enough funding to deliver on our initial strategy . We did not spend a lot of time trying to raise funds abroad as we wanted to spend considerable time in ensuring that each and every deal in our pipeline was well-executed . When we first started , we entered the residential market , and now we have shifted our attention to the commercial sector . We are engaged in projects such as malls , offices and hotels . They are riskier in the long term . Currently , we are putting together a strategy for global fund-raising but for the last three years we have been focusing on executing on the funds we already have . Word spreads , so when you deliver for people , one must ensure one ’ s success speaks . Our biggest challenge as with many PE shops or investment houses is putting capital to work and attaining desirable returns . This is incredibly hard , harder than fund-raising . So we probably will not be spending a lot time raising funds , but rather spending a lot of time delivering on the funds we have raised .

6 . Your diaspora Roadshow which was the 2016 USA roadshow has become the anatomy for Cytonn . Could the diaspora market be the goose that lays the golden eggs but one that has been ignored too far too long ?

R : We have done the diaspora roadshow twice , in 2015 and 2016 . We are going to do another one in 2017 . There is money in the diaspora - there is no question about it . Currently the diaspora remit more than USD1.5Bn ( Ksh150Bn ) annually . Even if 10 percent of it was going to real estate or into investment that would be Ksh15Bn but it is very difficult to regain trust as many of the diaspora feel as though they have been cheated several times by investors in Kenya . To date we have raised Ksh600Ml roughly from Kenyans in the diaspora . It could have been more if you look at the profitability of that Ksh600Ml versus the cost of raising it . To engage in a roadshow we have to incur a fair amount of expense . Every roadshow costs roughly Ksh 7 – 10 Million . It has not been the most profitable ; many financial institutions if they are candid enough , will tell you they are losing money on the diaspora . But I believable whoever is going to stick it for the long haul and those who create trust and attract a record of delivery will get an immense amount of business from the diaspora .

7 . Financial literacy in Africa is a major challenge that has cut back economic empowerment and investment growth especially for youth and women . What is Cytonn doing to promote financial literacy in Kenya and how are you looking at investors at the middle income level ?

R : When we talk about financial literacy the first thing that comes to mind is our profile . We have an initiative called Cytonn Foundation , which focuses on financial literacy and entrepreneurship . We regularly speak to people on building wealth , growing a business and improving their level of handling finances . We also initiated the Cytonn Entrepreneur Hub ( E-Hub ) which starts with a discussion forum and advances to a training program and progresses to a fundraising contest where participants showcase their ideas for fundraising , and finally the support . We have a team 12 people whose job it is to look at the day-to-day market and try to draw unique insights and advise investors .