Fidelity launches investment trust to raise US$60 million

FIDELITY Life Asset Management is launching a Real Estate Investment Trust (REIT), the Eagle Fund, aiming to raise about US$60 million to be invested in the development of medical, hospitality and residential facilities in Victoria Falls and Mazowe among other areas.

The Fund is expected to have a positive impact on the infrastructure development in Victoria Falls, Mazowe and other areas across the country.

A REIT is a regulated investment vehicle under the Collective Investment Scheme Act that enables the issuer to pool investors’ funds to invest in real estate.

In exchange, the investors receive units in the trust and as beneficiaries of the trust, share in the profits or income from the real estate assets owned by the trust.

In an interview on the sidelines of the investor engagement workshop in Bulawayo last week, Fidelity Life Asset Management managing director Mr Berven Ngara said in Victoria Falls, a 32-bed hospital to be operated by Heath Share from South Africa, a hotel to be operated by Arco Hotels, 154 residential townhouses and apartments on about 12,3 hectares of land, will be developed.

In Mazowe, a retail complex will be constructed to house a medical facility as well as residential space while in Mutare, Fidelity Life is converting an already existing building into a hotel which will have about 120 to 130 rooms.

“The focus is on foreign currency generating real estate assets. We are investing in the hospitality industry, particularly in Victoria Falls which has long been a dollarised market. We are professional investors so we must learn to diversify across asset classes but also currencies.

“What the Eagle fund is going to offer is different from existing REITs as it will be listed on the Victoria Falls Stock Exchange in United States (US) dollars and will generate predominantly US dollars. The REIT will pay at least 80 percent of its attributable profits as dividend every year and we will be paying a quarterly dividend.”

Fidelity Life Asset Management has started private placement to meet stakeholders and the investment community so that they can bring them on board during this development stage which they said has a development profit of about 15 percent.

Mr Ngara said they will continue to meet investors in Harare, Victoria Falls and other parts of the country to list at VFEX in the fourth quarter of this year.

He said after private placement, an initial public offering and listing on the VFEX are expected.

Mr Ngara said the target is to raise about US$17 million this year and US$9,4 million of this amount has already been raised. – chronicle