The Momentum African Real Estate Fund or MAREF, a joint venture between Momentum Global Investment Management and Eris Property Group, held a final close at the end of February, garnering a total of $170 million in commitments from eighteen investors including pension funds, institutions and family offices.
The fund, which was launched in 2014, is targeting a net IRR of 18% for its investors by building an investment portfolio of office blocks, shopping malls and warehouses in sub-Saharan Africa, excluding South Africa. Within the partnership, Eris will be responsible for sourcing, executing, developing and exiting the fund’s deals, whilst Momentum till be in charge of investor relations, fund management and operational oversight. Both companies are subsidiaries of MMI Holdings, the third largest life insurer in Africa.
So far, the fund has made three commercial real estate investments in Mauritius and Ghana. Between them, Mon Tresor Office Park, 335 Place and SU Tower represent a commitment of some 23% of the fund’s capital. The fund aims to make between three and five investments annually over the course of its investment life span, typically deploying $30 million to $50 million in capital for each deal.
In the statement put out last week announcing the fund closing, Eris Property’s CEO, Warren Schultze, expressed bullish sentiment for the fund. “We are pleased with the three commitments that we have made so far….”, he said, adding that the fund’s pipeline of potential deals was particularly encouraging. Ghana, Mauritius and East Africa seem to be the countries and region which offer the fund significant opportunities currently.
Bowmans and C&A Law acted as legal advisors in establishing the fund. PWC Mauritius and Intercontinental Trust provided due diligence, auditing and fund administration services.