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ARC launches real estate JV and plans to list on JSE

Africa Global Funds
April 3, 2017, midnight
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Word count: 381

African Rainbow Capital (ARC) a diversified black-owned financial services company, has launched ARC Real Estate, a joint venture between African Rainbow Capital and the Buffet KLT consortium.

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African Rainbow Capital (ARC) a diversified black-owned financial services company, has launched ARC Real Estate, a joint venture between African Rainbow Capital and the Buffet KLT consortium.

African Rainbow Capital will be the majority shareholder in the JV.

“Our rationale for the joint venture with Buffet KLT is its track record and partnership investment ethos. Jonathan Beare is one of the significant shareholders of Buffet KLT and together with its partners the consortium represents a substantial privately-held property and private equity investor in South Africa,” said ARC Chairman Patrice Motsepe.

Besides providing the venture with valuable empowerment credentials and a sizable balance sheet with which to operate, Motsepe sees empowerment as fundamental to creating an inclusive economy. 

“This partnership reflects what we think the best businesses in the world look like and we hope to demonstrate why we think we are better. Empowerment to me was always about bringing sectors of the population that could not participate in the mainstream economy to become partners in a world-class business,” said Motsepe.

The venture has appointed Mark Fox and Kentt Ellis to lead the team, and the venture has already closed its first investment with the purchase of the Setso Property Fund in December 2015. 

Fox said: “ARC Real Estate offers an alternative offtake by which corporates can consider the sale of the [property] asset to a black-owned fund, and not only benefit from the capital realisation but also from the ownership and/or procurement recognition in terms of their BBBEE scorecard.”

The venture will, for now, focus on the South African market, according to Johan van der Merwe, Co-CEO of ARC.

In addition, ARC intends to list an investment holding company on the Johannesburg Stock Exchange later this year.

Van der Merwe confirmed that the listing would probably happen by the third quarter of this year. 

The aim would be to hold majority stakes in a diverse array of non-financial services businesses. 

These would still be majority owned by ARC, and thus fully empowered, but would utilise public shareholders as substantial minority partners. 

“It will also hold a stake in the financial services business [ARC] we are creating. We want to keep the financial services separate because we think we can build a cohesive business,” he said.

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