Financial Services Editor - NEW CREDO FUND FOR SA’S WEALTHY By Regis Nyamakanga

LONDON-based wealth management firm Credo yesterday launched its third commercial property fund (Fund III) for private investors in SA.

Group director Alan Noik said the fund would target opportunities in the UK and Europe and planned to acquire £150m worth of property assets.

The fund is due to list on the Channel Islands Stock Exchange this month, making it eligible for asset swap funds, he said in Johannesburg.

“Fund III is open for investment with a minimum commitment per investor of £35000. It will provide semiannual dividends and is expected to realise an internal rate of return in excess of 12%,” Noik said.

Fund III would have a five-year lifespan with a potential two-year extension. “South African residents are able to invest using their R2m foreign exchange allowance or, to a greater extent, using an asset swap,” he said.

Fund III followed the success of Credo’s first two property funds. Fund I, fully invested, has to date generated a total return on investment of 89%. Fund II is 72% invested and as at June had generated a total return on investment of 18%.

“Fund III will target carefully selected opportunities in the UK and Eu-rope. While we believe Europe generally offers better returns than the UK, mainly due to lower interest rates and higher rental yields, we still believe UK opportunities will present themselves, because of market conditions.”

Given the volatile market conditions, Noik said, this was “an ideal time to be sitting on cash, waiting for the right property opportunity to arise”.

“Property prices have been driven down in light of the credit squeeze. European property offers positive, stable returns with strong capital growth in a strong currency."

“It’s a low-risk investment and can form part of an overall balanced investment portfolio.”