Actis raises $278 mln for Africa real estate

NAIROBI, Oct 9 (Reuters) - Emerging markets private equityfirm Actis has raised $278 million for investment in Africanreal estate to ride a housing boom fuelled by a growing middleclass.

Actis, one of the largest private equity investors in theworld's poorest countries, said on Tuesday the fund, ActisAfrica Real Estate 2, will focus on retail and officedevelopment in east, west and southern Africa, excluding SouthAfrica.

Although African economies are growing quickly - second onlyto Asia - there is a lack of sufficient liquidity in Africa'spublic capital markets, and investors are increasingly turningto private equity to tap into the continent's economic growth.

"Sub-Saharan Africa has a population of 800 million peopleand is the fastest urbanising region in the world but lack ofcapital often constrains real estate development," David Morley,head of Real Estate at Actis, said in a statement.

"Governments recognise the crucial role of FDI (foreigndirect investment) in this regard."

Infrastructure development is a capital-intensive businessthat most African governments struggling with large budgetdeficits cannot afford, making other regions more attractive toinvestors.

The private equity group has over $300 million invested inthe east African region.

Earlier this year, it said it was looking to invest around$300 million annually in Africa, with much of that earmarked forbigger markets such as South Africa.

Paul Fletcher, a senior partner at Actis, said the fund wasevidence of Actis's broader investment plan of building domesticinfrastructure in the emerging markets.

(Editing by James Macharia and mark Potter)

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