British private equity (PE) fund Actis and its joint venture partner, Shapoorji Pallonji Kenya, have agreed to sell property developer Mi Vida Homes to a consortium of local investors led by the company’s management, marking their exit from the investment after seven years.
Mi Vida chief executive officer Samuel Kariuki told the Business Daily that the consortium is buying out the entire share capital of Mi Vida’s holding company, which was formed as a joint venture between Actis and Shapoorji Pallonji Kenya in 2018.
The company has been putting up a mix of mid-market and affordable housing units at Actis-owned Garden City Mall, and has also recently branched out to other sites in Riruta and Ruaka.
However, Mr Kariuki did not disclose the value of the buyout, which is financed by a mix of equity and debt financed buyout.
He added that Actis’ exit was in line with the usual seven- to nine-year investment cycle adopted by PE funds.
Shapoorji Pallonji Group is an Indian conglomerate with interests in real estate, energy, textiles and financial services.
“Management has brought together a consortium of local institutional capital, and they [management] have also invested themselves directly. The combination of that will acquire the platform from Actis,” said Mr Kariuki, without naming the other investors partnering in the buyout.
“Given that they jointly owned the holding company, Actis and Shapoorji Pallonji Kenya will both exit.”
The management-led buyout also signals confidence by the C-suite in the business, which helped in the efforts to bring on board the local institutional investors who are participating in the transaction.
This sale to management marks a rare exit option for a private equity entity. Such firms have largely opted to exit from investment through the sale of stakes to fellow funds or strategic investors, such as development financial institutions, who can offer a premium and a prospect of closing the deal quickly.
PE funds also share similar investment and governance principles, making for a seamless transition between a buyer and seller when they take over assets from each other. Such funds invest in companies that show growth potential, hoping to increase the value of their investment by bringing in their expertise to the management of the target companies.
They normally exit the investment after some years, largely in line with the duration that they had promised to hold the capital of the investors who participate in their fundraising rounds.
In the case of Mi Vida, Actis and its joint venture partner had a target of hitting a base internal rate of return of 25 percent in shilling terms or 15 percent in dollar terms annually in the venture.
“This hurdle rate has been met and exceeded,” said Mr Kariuki, without disclosing the exact return the two partners achieved from the project.
Actis and Shapoorji Pallonji Kenya set up Mi Vida in 2018 with an initial committed funding of Sh12 billion, half of which was earmarked for a 740-unit housing unit at Garden City, dubbed Amaiya. Out of these units, 221 have been completed, with a further 249 due for handover in March 2026.
Due to onboarding new projects and raising additional cash, the two firms had grown the gross development value of the platform to Sh52 billion by the time of exit, with a total of 3,900 housing units in the pipeline across four sites in Nairobi.
“We believe this transaction highlights the depth of opportunity for long-term capital formation in African real estate and validates the strength of a model where global investors incubate, institutionalise and ultimately transition platforms to local ownership,” said Louis Deppe, a partner at Actis.
In addition to the residential property, Actis also developed a shopping mall and business park at the Garden City site. The mall opened its doors in 2015 after two years of construction, while the business park was opened in 2019 with listed brewer EABL occupying the first phase.
Although the residential segment was initially intended to be exclusively mid-market, Mi Vida ventured into the affordable housing segment in 2022 with a development of 647 units at the Thika Road site, with another 1,100 units currently being developed at Riruta.
The company made a bulk sale of 200 units at Garden City to the International Housing Solutions (HIS) Group in August 2023. The company handed over the units to the pan-African asset manager last week.
IHS has also inked an agreement with Mi Vida for an additional 240 units at the Riruta project, where 154 units are due to be handed over to buyers in the next two weeks.
The company’s mid-market apartment units are usually priced at between Sh8 million and Sh20 million each, while its affordable housing units—which now account for 70 percent of its portfolio— are priced at between Sh2.5 million and Sh8 million.
