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Rutley introduces east Africa fund

London-based Rutley Capital Management, the real estate private equity arm of Knight Frank, is preparing a fund focused on east Africa. The Rutley East Africa fund will aim to raise $200 million to invest in city-centre properties in the capital cities of Kenya, Uganda, Tanzania, Malawi, Democratic Republic of the Congo, Zambia, Botswana, Namibia, Mauritius and South Africa. The fund will formally launch by the end of this year.

"What we’ve detected from clients is that they want to be in Africa, but can’t get there," says Nick Burnell, managing partner. "There is a crescendo in investment activity in these countries where yields are between 12% and 13%. Clearly there is interest but very few people have the resources on the ground to do deals. Africa requires a hands-on approach."

Rutley’s parent company, Knight Frank, has 200 people working in Africa, with offices in Botswana, Kenya, Malawi, Mauritius, Nigeria, South Africa, Tanzania, Uganda, Zambia and Zimbabwe. The new fund will use the Knight Frank presence to seek out properties that have household names as tenants. Already, Rutley has identified a number of properties that have potential. The fund will be launched in conjunction with ICEA Asset Management, a subsidiary of the Insurance Company of East Africa.

"Africa presents such a unique opportunity," says Burnell. "The deal flow won’t be a problem and we won’t need to use much leverage because we’re already getting double-digit yields."