Old Mutual to increase agriculture, real estate investment through Nigerian partnership

9th September 2016

By: Mia Breytenbach

Creamer Media Deputy Editor: Features

  

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Asset management group Old Mutual Investment Group (OMIG) plans to expand its commercial real estate and agriculture footprints in Africa through a partnership with wealth fund the Nigerian Sovereign Investment Authority (NSIA).

The partnership, signed in Abuja, Nigeria, last month, will allow for the establishment of two separate co-investment vehicles in the region – a $500-million real estate investment vehicle and a $200-million agriculture investment vehicle.
Under the real estate investment agreement, the objective is to invest in commercial, retail and hospitality assets. The vehicle is targeting a total commitment of $500-million, with deal origination and execution to be undertaken jointly by the NSIA and Old Mutual. It is expected that the parties will each initially commit up to $100-million to the investment vehicle.
Further, the parties will make commitments for an initial fund size of $50-million for the agriculture investment vehicle, ahead of the targeted fund size of up to $200-million. They will also undertake the deal origination and execution.

The aim of this agreement is to improve food security and promote rural economic development to capitalise on the growing opportunities that the Nigerian agricultural industry provides, according to OMIG.

The deal follows OMIG’s announcement of an increase in its overall effective equity stake, to 49%, in African agriculture investment group UFF African Agri Investments. This partnership strengthens the long-time relationship between the two companies, with investment opportunities of up to $500-million in African farmland envisaged over the next five years.
The NSIA and OMIG’s commitment in the property and agriculture sector is underpinned by a shared vision of the significant opportunities presented by African real estate and agriculture investment, a vital economic driver in Africa, given a number of socioeconomic factors, including population growth, poverty and unemployment, according to OMIG.

Speaking at the signing of the deal in Abuja earlier this month, OMIG CEO Diane Radley said the partnership with the NSIA was a critical step in the development of OMIG’s commercial real estate and agriculture strategies in Africa.

“Our dealings with agriculture as an asset class has shown that it has gained huge momentum globally, but is still in its infancy in Africa. This presents a significant investment opportunity for . . . local and international investors,” she explained.

She noted that OMIG’s experience, combined with the NSIA’s significant local knowledge and capacity in the real estate and agriculture sectors of the Nigerian economy allowed for a formidable partnership.

“Together, we believe we can add significant value to both our clients, as well as the development of the Nigerian economy as we continue to be committed to sustainable, long-term investing.”

The NSIA believes that the property development and agriculture sectors offer considerable potential for economic growth in Nigeria, according to NSIA MD and CEO Uche Orji.

“Our commitment in these sectors is underpinned by the economic imperatives of urbanisation, population growth and enhancement of liquidity for the sector.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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