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South African firm launches $1bn Africa fund

Capitalworks Investment Partners is looking to take advantage of the commodities boom with a new fund targeting Sub-Saharan Africa.

A new property fund targeting sub-Saharan Africa is being shopped to UK investors by Capitalworks Investment Partners, a South African fund manager. The fund, launched earlier this month, is looking to raise $500 million (€318 million) in equity, and to add an additional $500 million in debt, according to the Financial Times.

The fund is reportedly targeting a 25 percent IRR. Capitalworks is mainly looking for investors in the UK and the Middle East, but it may also take on investors from elsewhere. The firm intends to hold its first close by late summer.

The fund will start with a portfolio of eight retail and office properties in South Africa and Zambia. The fund will also be looking for assets in the Sub-Saharan African countries which are most stable, especially Mozambique, Nigeria, Ghana, Mauritius and Zambia.

Property in Africa is becoming increasingly discussed, as a commodity boom opens up new opportunities for investment. African countries rich in natural resources are seeing production increase, and the result inflow of capital is driving retail and office opportunities. Rutley Capital Partners, the real estate private equity business of property agent Knight Frank, is currently fundraising for an East African property fund, which will be run in conjunction with the Insurance Company of East Africa.