Wealth & Finance May 2016

Page 51


Investing in Crowdfunding Projects Crowdfunding is ideal to open up the African Real Estate Market Realty Africa is established by Patrick Chella and Erik van Eeten, two seasoned professionals from the Netherlands and has a diverse team of people with a lot of banking, investment and IT expertise. Patrick Chella spent his youth in Zimbabwe before moving to the Netherlands to study and work in the Investment and Banking Sector.

Erik van Eeten started his career at IBM as a Business consultant and transferred to the Investment and Banking Industry. Realty Africa has a lot of expertise in the local markets with one co-founder born and raised in Zimbabwe as well as through the benefit of local teams which we establish in each country. Erik van Eeten imparts his expertise about Realty Africa and the opportunities of investing in Sub-Saharan Real Estate projects via their platform.

where the landowner can meet developers and architects to achieve common interests and create joint ventures and more services will follow. How does crowdfunding fit in the local tradition and how can the local community benefit? We believe in the future of the African Real Estate markets. From an investment perspective and more importantly from the Impact that these developments have on the local community. We have a large variety of projects in the pipeline which includes Social Housing, Student Housing, Eco Lodges but also middle-income housing and luxury apartments. Africa has a long history with crowdfunding. Whole communities would pull funds for creating a building. For instance, the University of Botswana was largely “crowdfunded�. This process of financing not only facilitates the funding but also creates a feeling of mutual ownership and care for the longer term. We are enabling the African community to take this concept to the next level to get access to the international retail and professional investment community. With our additional services, we support the local developers already in the pre-finance stage. These services will also deepen our knowledge of the local markets, which is to the benefit of all our customers.

Can you give a brief overview of what your company does as a property crowdfunding platform? If I am asked to describe Realty Africa, I have to distinguish between two groups. We not only see the investors as our customers but also have a very strong focus on the developers. From the start, we took the concept of investing in Africa very seriously and wanted to develop a new approach towards fiduciary responsibility and investor security in the crowdfunding space. It took longer to setup than we anticipated, but for investors, we can offer great investment opportunities in Real Estate which are fully securitized and well suited for retail, professional as well as institutional investors. We thoroughly vet all investments with the help of our service provider Deloitte and we stay involved to manage and monitor the investor interests until the end. We perform site visits and use drip financing to protect the investors. Large investors are welcome to perform their due diligence as well, even before the project lands on the platform.

With crowdfunding growing in a variety of sectors, to what extent do you feel that businesses and investors are now starting to a pay attention to projects using this investment method? It is a misconception that crowdfunding is only for small amounts and non-professional investors. Crowdfunding is a way of democratising investments. In our view it is ideal for investors who would like to have more control. You can select the project that you like instead of a mandate to a fund manager. At the same time, investing in real estate in Sub-Saharan Africa is also an ideal way for professional investors to spread risk in an investment class with higher yield and which is maybe outside of your expertise. Investors who prefer Impact investments

At the same time, we want to really empower the local landowners, developers and architects in Sub-Saharan Africa. We developed a total service portfolio which we will launch in stages. These will support the local professionals and enable their businesses. Qualified projects have access to international funding on our crowdfunding platform. We are also soon launching our RA Connect platform