Vulture private equity property fund targeting international 'meltdown'

Posted On Friday, 15 August 2008 02:00 Published by
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Three brothers from a well-known SA property family are set to launch a R100m global property “vulture” fund in order that SA investors can take advantage of the international property meltdown

Anton (47), Mike (46) and Karl (45) de Leeuw live in three countries and have spent 10 years building a property portfolio in eight countries.

They are sons of leading quantity surveyor C.P. de Leeuw, a former president of property organisation Sapoa. Their vulture fund will pick up properties at bargain prices from distressed sellers in different countries, to resell a few years later at a profit.

“The rand is unusually strong because of the revival of the carry trade – with mainly Japanese investors borrowing in Yen at low interest rates and investing in high interest rate rand markets,” says Anton de Leeuw, who has a master degree in commerce and lives in SA. He heads investment educationist and investment vehicle YDL. “So its ideal to build SA investments in a foreign currency. We’ll then hold the money to invest over the next few years as opportunities arise.”

He says the first properties will probably be bought in the Republic of Ireland, followed by Belfast, Northern Ireland and Warsaw, Poland. “My brother Karl, a quantity surveyor and a full time property investor in Dublin, has already found apartments in central Belfast at half the average price,” says de Leeuw. “But we can probably do better if we wait a bit longer.”

The third brother, Mike de Leeuw is an Australia-based chartered accountant with a master in applied finance and investment. He is the chief financial officer of a global private equity firm with R10bn under management, and provides financial, tax and structuring advice to the fund. The de Leeuws recently launched the first tranche of a Polish property fund that is fully subscribed, partially by South Africans.

“The vulture fund will concentrate on medium term capital gain because the property slump still has some time and way to go,” adds de Leeuw. “We may take up to two years to invest the full fund. It will need intensive research to get the timing right and aggressive, sometimes protracted negotiations to get the best opportunities. It’s not possible to say what we will achieve but we have a target return in excess of 20% per annum.”

De Leeuw can’t estimate the demand by South Africans for the fund. “But we are having meetings with our investor base where we will be able to judge their appetite for vulture investment.”

Publisher: eProp
Source: Marshall Inc

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