RMB Westport collects $250m in rare Africa final closing

A joint venture between Johannesburg-based Rand Merchant Bank and Westport Property Group has enjoyed capital raising success for its first real estate opportunity fund.

RMB Westport, a joint venture between Johannesburg-based bank Rand Merchant Bank and property company Westport Property Group, are celebrating a rare capital raising for an opportunistic real estate fund focused on Africa, PERE can reveal.

Approximately 14 months after bringing its RMB Wesport Real Estate Development Fund to market, the joint venture has held a final closing at its original target of $250 million thanks to investments by 10 institutional investors.

Among the investors are a large Middle Eastern investor from Abu Dhabi and one of the largest Canadian public pension plans as well as a number of other North American investors.

The eight-year fund was seeded with $48 million of equity by Rand Merchant Bank and $2 million from the seven staff of RMB Westport.

RMB Westport is one of a tiny handful of investment managers offering African real estate funds.  Another notable, and comparable, example is London-based emerging markets private equity firm Actis which currently is marketing its second fund, Actis Africa Real Estate Fund II, with the expectation of garnering the same amount.

Africa has long been considered a hard sell for global institutional investors owing to a number of risks inherent in its immature markets. However, RMB Westport’s existing deal pipeline is understood to have helped encourage commitments from investors.

RMB Westport’s fund is expected to invest in assets primarily in Nigeria, Ghana and Angola although investments in Mauritius, Tanzania, Kenya and Zambia might also feature. Typical equity investments are expected to be of between $15 million and $40 million. While the majority will be in development situations, land acquisitions could also figure as could investments in mezzanine and debt positions.

The fund is expected to generate a net IRR of more than 30 percent and a gross equity multiple of more than 2x.