The Momentum Africa Real Estate Fund “MAREF” held its final close at the end of February 2017, raising a total of $170m, up $20m from the $150m the fund had raised by August 2016.
A total of eighteen investors committed to the MAREF including pension funds, institutions and family offices. It is seeking to achieve an 18% net IRR for its investors by investing in a portfolio of commercial real estate developments (office blocks, shopping malls and warehouses) in Ghana, Kenya, Mauritius, Mozambique, Nigeria, Rwanda, Uganda, Tanzania and Zambia.
Up to 23% of investor capital is currently committed to three projects which include an office block in Mauritius and two office blocks in Accra, Ghana (335 Place and The Union). The fund was also pursuing projects in Nigeria however it appears as though those interests have been placed on hold.
Warren Schultze, CEO of Eris Property Group, said:
“We are very pleased with the three commitments that we have made so far and we are particularly encouraged by MAREF’s swelling investment pipeline in Ghana, Mauritius and East Africa.”
The fund was initially looking to raise $250m, however commodity price induced recessions which has affected multiple African economies. The AVCA reported that private equity fundraising in Sub-Saharan Africa during 2016 fell 47% to $2.3bn; down from $4.3bn in the previous year.
MAREF is a joint venture between sister companies Momentum Global Investment Management in London and Eris Property Group in South Africa, both subsidiaries of Johannesburg-listed MMI Holdings Limited, Africa’s third largest life insurer. Momentum is responsible for the fund-raising, investor relations, fund management and operational oversight whilst Eris is responsible for the origination, development, management and exit of MAREF’s assets.