Brazil Property Development Fund

The Brazilian Government is committed to providing millions of affordable homes and encouraging the private sector to help build them. For many years Brazil's lower and middle classes were unable to borrow money from banks; unemployment was high and pay was low. As a result shanty towns (Favelas) in and around Brazil's largest cities were growing in size. Their lack of basic amenities, such as running water and legal supplies of electricity meant these places were not pleasant places to live in.

After the election in 2003 of Brazil's former President, Luiz Inάcio Lula de Silva, Brazil's economic situation has continued to improve; with disposable incomes increasing faster than the cost of living. Consumer spending has also increased, along with the demand for better-quality and affordable homes. However, according to the Brazilian Institute of Statistics there is a shortfall of seven million homes across the country. Based on current projections this shortfall will increase to 22 million homes by 2020.

In March 2009 the Brazilian Government implemented the Minha Casa, Minha Vida programme. Under this scheme the government invested US$14bn to build one million affordable housing units by 2014. This budget has since more than doubled and the target is now three million homes by 2016, through Minha Casa, Minha Vida 2. The federal investment programme only scratches the surface of the shortfall in affordable housing. Therefore, the government is offering incentives to private businesses to help fulfil this shortfall.

Arjent have teamed up with Brazilian property Fund Manager, Ignition Investment, to offer a tailored fund investing in Brazil's affordable housing schemes. We believe it is an ideal time to invest in this region. Over the next five years Brazil will play host to two world class sporting events; the 2014 FIFA World Cup and the Olympic Games in 2016, and are currently investing US$16bn nationwide on improving its infrastructure to support these events.