London-headquartered private equity firm Actis has raised the biggest institutional fund for investments in African private real estate markets, PERE can reveal.
The firm has raised more than $500 million for the third fund of its African series, Actis Africa Real Estate Fund 3 thanks to investments from institutions including pension funds, sovereign wealth funds, development finance institutions and endowments. Investors to back the vehicle came from Africa, Asia, Europe and North America.
The record fundraise is an important next milestone in the evolution of private real estate fund management in Africa and a further indication of how increasingly accepting institutional investors are of strategies for the asset class in the region. Not only is the Actis fundraising a record fundraise for African real estate and is the third in a series, it also attracted an additional $100 million more than the $400 million the firm originally targeted.
Among the investors in the fund is GIC Private, the sovereign wealth fund of Singapore, which had previously not invested in African real estate and had minimal exposure to the region. PERE revealed earlier this year that GIC committed at least $100 million to the region via commitments to the Actis fund and the second fund of the firm’s closest competitor RMB Westport, RMB Westport Real Estate Development Fund II, which is currently finishing off fundraising. RMB Westport is aiming to raise $450 million for its fund but it is also thought that the Johannesburg-based firm will also exceed its target.
Actis will use the proceeds of its fundraising to invest in retail, office and industrial developments in between seven and eight capital cities in Sub-Saharan Africa. Investments will be made from Actis’ offices in London, Johannesburg, Nairobi and Lagos.
David Morley, head of real estate at Actis, said: “This successful fundraising is a further sign of confidence from our investors in our ability to identify the most compelling opportunities across Africa.” The firm has to date invested in assets valued at $1.4 billion on a gross asset basis. Morley said: “With this new vehicle, they will satisfy part of the demand for institutional quality real estate in some of the fastest growing cities globally.”
Actis’ fundraising was supported by First Avenue, the placement agent.