27 December 2012

Africa: Pan-African Housing Fund Closes At U.S.$41 Million

Photo: Boakai Fofana/allAfrica
Housing co-operation builds 182 low-cost houses.

The Pan African Housing Fund (PAHF), a private equity fund designed to respond to an ever growing housing shortage in Eastern and Southern Africa, reached its first closing at US$ 41.5 million in December 2012.

The Fund's Sponsor, Shelter Afrique identified Phatisa in 2011 as Fund Manager and has worked closely together with a pool of African and European development finance institutions (DFIs) during the fund raising stage.

The Fund is targeting a final close at $ 100 million in 2013. PAHF's investment thesis lies in providing risk capital to projects with developers who have demonstrated an ability to successfully execute in the Fund's target real estate sector.

The Fund will also work closely with these developers to increase their capabilities across both technical and scale dimensions. The Fund will invest in middle income and lower-middle income residential developments and mixed use precincts, where both residential and commercial are combined.

PAHF will only consider transactions where it has the capability to execute and manage all risk aspects of the investment. Initial geographies identified are Kenya, Uganda, Rwanda, Tanzania, Mozambique and Zambia.

The Fund will be investing primarily in the major urban areas within these countries, with a focus on mitigating environmental, social and governance risks.

Phatisa's property team comprises seasoned professionals with a depth of experience in private equity, fund management, property investment and development, led by Eton Price and Jan van der Merwe. Phatisa is an indigenous African Fund Manager with five regional offices across the continent.

The Fund will be managed in accordance with Phatisa's core values of professionalism, rigor and transparency. The Fund will operate according to a Risk Management Framework, which revolves around the alignment of interests between PAHF and the development partner, through the correct selection of projects, the monitoring of deals, transparent corporate governance and the optimum exit of each investment.

Supporting policies include a Social and Environmental Management System, Anti Money Laundering Policy, Anti Bribery & Corruption Policy and a Code of Conduct for Land Acquisition and Land Use to prevent unsustainable practices.

"Shelter Afrique is proud of the first closing of PAHF which is the first private equity fund dedicated to housing development in Africa. It will fill a gap for risk capital, which is the scarcest financial resource and will improve the corporate governance in the sector. This is a key strategic investment toward improving the supply of affordable housing..." stated the Shelter Afrique Managing Director.

The Phatisa team is confident that the commercial success of this new African property fund will meet the expectations of both the Fund's multi-national investors and the potential Eastern and Southern African homeowners who will benefit from the Fund's development.

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