Sanlam is set to launch a sub-Saharan Africa Real Estate Fund and intends to list it on the Stock Exchange of Mauritius soon, BD Live reported on Tuesday.

South Africa’s second biggest life insurer has also confirmed that the official launch would be at the end of next month.

It is understood that the fund excludes South African real estate. And it forms part of Sanlam’s growth strategy into Africa and was initially intended to be launched last month.

BD Live quoted Sanlam Investments CEO, Johan van der Merwe, as saying the fund “aims to take advantage of the favourable supply and demand imbalance for quality real estate across the subcontinent, as well as its strengthening demographics and resultant return characteristics”.

BD Live reported that Sanlam expected to grow the portfolio to more than $500 million over the medium term, with the bulk of initial investors expected from the US and southern Africa.

Sanlam is set to close the initial capital-raising process on March 31 this year, with the target audience being large institutions in the savings industry.

Van der Merwe told BD Live that while most of the developed world “is struggling to find yield”, Africa had seven of the top 10 growing economies in the world.

This created an opportunity for Sanlam to provide the investor community “with a suite of products that facilitated participation in these markets.

Sanlam Properties CEO Thomas Reilly said “sophisticated investors” had struggled to find an internationally acceptable product to access the growing African market. Reilly said while its holding in the Accra Mall in Ghana was the fund’s only property, “we have been able to secure a strong pipeline of select assets with attractive returns”.

Reilly added the fund would not develop property but would acquire existing income-earning assets in countries where Sanlam had a footprint, including various West and East African countries, as well as Zambia and Mozambique.