Lewis Charles offers sweetener for Abu Dhabi fund

In an effort to attract investors to its $100m Abu Dhabi focused residential fund, the UK fund manager, Lewis Charles Securities, has restructured the vehicle to provide both a dividend and a capital return.

Lewis Charles Securities Limited, the London-based stock broking and fund management firm, has altered the structure of its residential Lewis Charles Abu Dhabi Property Fund, in an effort to lure investors.

The firm began marketing the three-year opportunity fund, which is targeting $100 million, in January. It is planning a first close by 31 May with a final close intended by the end of the year when the fund will begin investing.

Lewis Charles is hoping to entice investors by offering both a periodical dividend return as well as a capital return to be realised after the fund has exited its investments. It plans to do this by increasing its investment into rented residential property in Abu Dhabi in addition to investing in off-plan assets which would then be sold to end users. 

The income portion of the fund is planned to generate a return of 14 percent while the overall internal rate of return for the fund is hoped to be in excess of 25 percent.

Stavros Loizou, Lewis Charles investment manager, said: “We know we are competing with a lot of other funds in the market so we have to have incentives to ensure our fund is unique.” Loizou declined to discuss figures, but said that the firm had already made inroads into its equity raising target.
The fund is targeting both completed properties and those in development. According to Lewis Charles’s fund marketing document, there is “an acute supply demand imbalance” in the Emirate. It said the occupancy level across Abu Dhabi’s residential sector was more than 98 percent.