British private equity (PE) firm Actis has raised Sh50.5 billion ($500 million) for real estate investment in eight African countries including Kenya, its directors said last Friday.
However, the firm did not disclose the amount intended for Kenya.
Actis said it had targeted to raise Sh40 billion ($400 million) in its third African real estate fund dubbed ARE3, but managed to get an extra Sh10 billion from the institutional investors taking up the offer.
“The fund has a diverse investor base, including pension funds, sovereign wealth funds, development finance institutions and endowments from Africa, Asia, Europe and North America. The new fund is significantly larger than Actis Africa real estate fund 2, which closed in October 2012 with commitments of $278 million,” said Actis in a statement last Friday.
“The investment will go predominantly into prime retail, office and industrial developments in the capital cities of seven to eight sub-Saharan African markets.”
The British firm is the principal developer of the Garden City mall along Thika Road, where it is currently putting up office blocks in the second development phase. The International Finance Corporation and the CDC Group are also investors in the project.
Actis’ new cash injection comes after a period of heightened activity in its East African investments, where it has exited two power sector investments in Kenya and Uganda in the last two years.
Last September, the PE firm sold its 30 per cent stake in Globeleq Africa, the energy company that owns the 75 megawatt (MW) Mombasa-based thermal power Tsavo Power (commonly referred to as Kipevu II), to CDC and Norwegian development financier Norfund for $227 million (Sh23 billion).
Globeleq also has power plants in Cameroon, Tanzania, Cote d’Ivoire and South Africa.
Actis in June 2014 sold shareholding in Ugandan power utility Umeme to institutional and retail investors, reducing its stake to 14.3 per cent from 60.08 per cent.
PE firms have been increasing their investment in Kenya in recent years, attracted by high returns especially in the real estate and financial sectors.
In April, third-tier Jamii Bora Bank raised Sh1.2 billion through an equity investment from Equator Capital Partners and Progression Capital Africa, who joined fellow PE firm Catalyst Principal Partners as significant shareholders of the bank.