THE PAN AFRICAN HOUSING FUND
Shelter-Afrique appointed Phatisa in 2011 to manage the Pan African Housing Fund (PAHF), a new real estate private equity fund. The Fund first closed on US$ 41.5 million end Q4 2012, commenced operation Q1 2013 and targeting a final close Q1 2014. The Phatisa team members managing the Fund have an exceptional track record in executing real estate transactions and has generated well-developed pipeline covering Eastern and Southern Africa.
INVESTMENT SECTOR AND GEOGRAPHIES
The Fund will invest primarily in affordable and middle income residential developments and mixed use precincts, where both residential and commercial are combined.
The Fund will initially target a limited set of geographies in order to demonstrate the opportunity to investors. The Fund will only execute transactions where it has the capability to execute and manage all risk aspects of the investment. Initial geographies identified are Kenya, Zambia, Rwanda, Mozambique, Tanzania and Uganda. The PAHF will be investing in the major urban areas within these geographies.
Investments outside these sectors and geographies will require special approval from the Investment Committee.
The investment opportunity arises from the shortage of housing units in Africa and an on-going increase in demand for housing. According to the East African Development Bank, the sector requires at least US$ 2.5 billion per annum for investment in Africa. The Fund has identified a number of obstacles to the development of an efficient residential market. While there many obstacles to housing delivery, the principal obstacle is a shortage of equity and loan finance. Many projects are too thinly capitalised leaving almost no margin for delays or cost over-runs and as result threaten not only the development capital introduced by the sponsor but also that of the purchaser who stands to lose his capital introduced by way of deposit finance.
The key obstacle in several markets lies in the lack of an established ‘developer class’ and the Fund will actively seek to provide risk capital and other resources to indigeneous developers in the identified geographies.
FREQUENTLY ASKED QUESTIONS
Primarily European Development Finance Institutions, African Banks and Insurance Companies.
Who manages the PAHF?
Phatisa Property Fund Managers LLP a Mauritian registered company.
Who are the Managers?
Eton Price and Jan van der Merwe are the joint Phatisa Fund Managers.
What is the PAHF investment thesis?
The PAHF will invest primarily in affordable and middle income housing projects and mixed use developments comprising of housing and aligned commercial developments.
Where does the PAHF invest?
In the main metropolitan cities in countries like Kenya, Zambia, Rwanda, Mozambique, Tanzania, Mozambique and Uganda.
How big is the PAHF?
It is anticipated that the PAHF will have capital of up to US$ 60 million to invest.
How much funding is available for a deal?
The PAHF can invest a maximum indicative amount of US$ 5 million.
How much does the developer need to contribute?
While the PAHF has been formed to address the shortage of equity available for property developments in our chosen markets, it is important that the developer contribute at least the value of the land parcel applicable to a particular deal.
What is the PAHF’s time horizon?
The PAHF investment will ordinarily be for a period of not longer than five years, with clearly defined exit strategies being addressed before investment.
How does the PAHF deploy funds?
The PAHF deploys equity into Special Purpose Vehicles (SPV) that own housing projects.
Does the PAHF partner with developers?
Yes, it is very important that the PAHF partners with experienced developers on each project.
What else does the PAHF bring to a deal?
The PAHF brings with it a wealth of property, development and finance expertise. In addition, a number of the PAHF investors have expressed an interest to either co-invest with the PAHF where the deal size is too big for the PAHF, and/or to provide debt into each project.
How does the PAHF mitigate the risk of investment?
The PAHF employs a rigorous Risk Management Framework, which revolves around the alignment of interests between the PAHF and the development partner, through the correct selection of projects and developers, the monitoring of the deals and the optimum exit of each investment.
Does the PAHF consider Environmental, Social and Governance (ESG) issues when making investments?
These considerations are core to our investment thesis and we will assess the impact of each project on the basis of the ESG impact that project will deliver.
CONTACT DETAILS
If you require more information on the Fund or have an investment proposal you would like to submit, please contact:
Jan van der Merwe Fund Partner - Pan African Housing Fund
Email janvandermerwe@phatisa.comEton Price Fund Partner - Pan African Housing Fund
Email etonprice@phatisa.com
OUR SPONSOR AND PARTNER
Nelly Defo Head of Investment and Special Products - Shelter AfriquieEmail ndefo@shelterafrique
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'The key pillar of the PAHF’s strategy is the promotion and enablement of a “developer class” that has the capabilities and resources to roll-out large scale residential developments together with chosen partners.'
Eton Price, Fund Partner - Pan African Housing Fund |
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Corporate Responsibility Last Update: 22 May 2013 | © Phatisa 2013 All rights reserved |