Money Manager Targets Return From Housing S. Africa Students

Updated on
  • Inkunzi fund to hold 13 buildings, valued at $165 million
  • CEO Owen Nkomo says he is stepping down once fund is listed

South African stock exchange investors are about to get their first opportunity to bet on income from housing students enrolled at the country’s campuses.

Inkunzi Wealth Group, a Johannesburg-based money manager, intends to offer shares in a student accommodation fund on the city’s main exchange before the year is out, Chief Executive Officer Owen Nkomo said in an interview. There’s demand from listed property investors for an alternative to exposure to shopping malls, offices and residential buildings, he said.

“We could have listed a general fund, but we decided there’s too many of these already -- we need to bring a different story,” said Nkomo, 37, whose firm has been operating since 2011. He wouldn’t disclose how much money Inkunzi oversees for clients.

The Inkunzi Student Accommodation Fund’s assets will include 2.2 billion rand ($165 million) of student residences -- 13 buildings constructed to provide housing at campuses in South Africa’s Eastern Cape, Gauteng and Mpumalanga provinces. The fund could later make purchases in Australia and other countries, Nkomo said.

Investors in Johannesburg’s 23-member FTSE/JSE Africa Real Estate Supersector Index have fared worse than the broad benchmark this year, with the stocks posting a 1.1 percent gain, lagging the 15 percent advance in the main gauge. The MSCI World Real Estate Investment Trusts Index has climbed 10 percent.

Inkunzi has identified an attractive area of specialization within the sector, said Nkomo, who earlier in his career worked for Citigroup Inc., Deutsche Bank AG and JPMorgan Chase & Co. “We wanted to get into a niche space, which we are in right now -- student accommodation.”

Once the listing is completed, Nkomo will step down as CEO, while remaining chairman and devoting time to the student accommodation fund, he said. Sphelele Mncube, who joined Inkunzi from Allan Gray in 2013, will succeed him.

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