March 2, 2016

GIC Invests in Africa through Actis and RMB Westport

Kayode Ola

The Government of Singapore Investment Corporation (GIC) has made its initial commitment to African real estate with its investments in two of the region’s largest firms; Actis and RMB Westport.

According to an exclusive release from PERE, the Singaporean sovereign wealth fund whose real estate division is considered aggressive compared to other sovereign wealth funds is understood to have committed more than $100 million across two separate commitments to the latest development funds of Actis and RMB Westport via Actis Real Estate Fund 3 and the RMB Westport Real Estate Development Fund II. It is important to note that Actis is aiming to raise as much as $400 million for its Actis Fund 3, while RMB Westport is seeking $450 million for its RMB Westport Fund II.

Heritage Place - Owned by Actis and Primrose Development Company.
Heritage Place – Owned by Actis and Primrose Development Company.

According to the press release, GIC’s annual report showed 43 percent of its overall assets in the US, 25 percent in Europe, 30 percent in Asia and 2 percent in Australia. It’s lack of direct presence in Africa could be one of the reasons why it has chosen to invest indirectly via Actis and RMB Westport.

Including this commitment, both companies have already hit their targets with Actis reported to be above the $100 million mark, while RMB Westport beyond $240 million. According to PERE’s Research & Analytics, approximately $1.5 billion was raised for Sub-Saharan Africa by about 10 managers since the global financial crisis, with the majority of this capital going into Sub-Saharan development strategies in countries like Nigeria, Ghana, and Kenya.

According to a person with knowledge of the matter as contained in press release, GIC’s commitment to both firms was essential for the sovereign wealth fund to achieve appropriate scale, despite being the largest funds in the market, neither would be large enough to accommodate the investor without it taking up too large a share.

He said: “To make the geography worthwhile, they had to commit sizeable amount of money. The group needs to make sizeable commitment to the geography. They need to invest in the two funds in order to do that”.

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