Lewis Charles targets Abu Dhabi with new fund

London-based independent stockbroker Lewis Charles Securities is launching what it says will be the first UK real estate fund aimed at Abu Dhabi to tap into the property sector in the Middle East.

The company expects to launch the non-listed vehicle named Lewis Charles Abu Dhabi Property Fund in early November. It will have $100 mln (EUR 80 mln) in equity and a target internal rate of return of 30%.

Stravos Loizou, CEO of Lewis Charles Securities, commented: 'The opportunities in Abu Dhabi and the UAE speak for themselves. What we have done is spend the last couple of years understanding the property industry there fully and establishing key relationships that will help ensure the success of this fund.'

The fund is primarily targeting investors in the UK, the UAE and the wider Gulf region. 'We are directly involved in taking this opportunity to market, as well as dealing with a large network of investment advisers as well as private equity companies, Loizou said.

He said a key element of the fund's investment strategy is securing the inbuilt equity available to those able to source cash deals. 'These essentially buck the trend of acquiring highly leveraged properties that has been very popular in the UAE. There are a number of benefits to the cash deal approach. It reduces the fund’s exposure in terms of borrowing (clearly a key concern at the moment) and due to the inbuilt equity realized from day one, it also protects against any market downturn, to quite a significant degree.'

Talking about future plans, Loizou said: 'There are so many opportunities in the Gulf Region and further afield that we fully intend to take the next logical step and to explore other GCC countries like Qatar, Oman and Saudi. The Saudi Arabian market is on target for sustained growth within the next five years.'

Lewis Charles manages two AIM-listed property funds, with just under $140 mln (EUR 111 mln) under management.