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The value equation: Fedgroup extends c.R1bn in financing to the Alleyroads Group

Specialist financial services provider, Fedgroup, has extended c.R1 billion in financing to the Alleyroads Group in what is seen as a significant development in South Africa’s commercial real estate industry.

Commercial real estate has played an important role in Fedgroup’s thirty-four-year history and while its business has rapidly expanded in recent years to offer a broad spectrum of financial products and services, property remains at its foundation.

Our licenses and specialist capabilities enable us to service the senior debt market with unique solutions,” says Jason Green, GM of Property at Fedgroup.

The Group specialises in various alternative asset classes including renewables and agriculture in addition to its property capability. Across the broader Group, Fedgroup’s subsidiaries include an IoT company, a solar EPC, an asset manager, and an IT company. These subsidiaries support the creation of value and reduction of waste across the organisation and as part of structured solutions for its clients.

These subsidiaries are complimentary in the context of our broader ecosystem, but Fedgroup is much more than this,” says Green. “Our focus remains on being alternative asset specialists who are on the ground and who understand the assets.”

Building on its three-decade history, Fedgroup continues to grow a network of partners across its business, expanding throughout South Africa.

We are in the business of finding good strategic partners and using this as an opportunity to build relationships that provide a platform to scale their businesses,” he says. “It is a value equation. We are sector agnostic, always open to exploring opportunities and committed to building a sustainable book to offer our investors diversified exposure.”

“Our relationship with the Alleyroads Group goes back to 2018 and we have witnessed their exponential growth over this period. This recent transaction was an opportunity for us to assist them further on this growth trajectory while offering a compelling investment case for our investors.”

The Alleyroads Group operates across a range of sectors with this transaction growing their exposure in a segment of the market that is critical in terms of South Africa’s economic and social landscape; lower-middle income residential rental stock and student accommodation. This portion of the market is largely underserved in terms of quality stock of which there is a huge demand, with a relatively low supply.

He emphasises this by saying that “Fedgroup understands the entrepreneurial mindset and employs a flexible approach to meeting unique client requirements without layers of bureaucracy or wasted time. In fact, we make it our business to add value and efficiency to property financing solutions. This includes applying a more holistic view of borrowers and not simply making decisions based on tick boxes.”

This transaction with the Alleyroads Group is an example of how Fedgroup’s foundation continues to serve their clients and investors. By tapping into their growing network, while leveraging their internal custom-built systems and capabilities, they can identify the right kind of opportunities and structure solutions that enable their clients to capitalise on specific opportunities.

It has been said that if you throw a brick in Fedgroup’s building, you will hit an engineer, not an accountant. Our alternative asset finance specialists are supported by our technology backbone, and we are focusing on what we do best while growing our reach so that we can help entrepreneurs and investors across the country,” concludes Green.