Indiabulls Asset Mgmt to invest Rs 10,000 cr through real estate funds in 5 years

Just in case you are one of those people who believe that the Indian real estate market still has upside, Indiabulls Asset Management has launched its maiden real estate fund.

The Rs 500-cr fund will invest in residential projects in top 5 cities in India.

“We plan to scale up our AIF / Co-investment presence and have plans to raise over Rs 10,000 Crores under real-estate fund category in next 5 years from offshore and onshore markets,” said Akshay Gupta, the company’s Group Executive head and CEO.

“The (first) fund intends to invest in geographies with proven market depth, high inherent demand, pricing stability and projects with low execution risk. The proposed target fund size is INR 500 Crore with an additional option of raising INR 500 Crore and focusing an average deal tenure of 3 years,” the company said in a statement.

The fund has been rated ‘AAA (AIF)’ by CARE Ratings.

The fund’s focus shall be to capture growth opportunities across lifecycle of investee companies through primary, secondary and co-investment opportunities, it added.

The investments shall be structured in the form of fully secured Non-Convertible Debentures with a well-defined exit strategy and periodic returns on a quarterly basis along with a back-ended upside. The sponsor of the fund, Indiabulls Housing Finance Ltd, a AAA-rated company, has expertise in mortgage financing business with strong lineage in managing developer project lifecycles.

The company recently appointed Mr. Ambar Maheshwari as Chief Executive Officer (CEO) of its alternate investment funds business. Earlier Mr. Maheshwari was Managing Director of Corporate Finance at realty consultant Jones Lang LaSalle.

“The recent announcement of interest rate cut is expected to boost housing demand and will help in reviving the real estate market sentiments. The various initiatives taken by the government such as relaxation of Foreign direct investment (FDI) norms in the construction sector, Ordinance on the Land Acquisition Act and the legislation awaiting Parliamentary approval on the Real Estate (Development and Regulation), Bill has the potential to spur new project developments in the real estate space,” said Maheshwari, CEO – Private Equity Fund, at the company.

AIFs are generally funds established or incorporated in India for pooling in capital from Indian and foreign investors for investing in accordance with a well-defined policy.

The Securities and Exchange Board of India (SEBI) had notified the AIF regulations in May 2012, and since then had granted registrations to over 100 such funds. SEBI issued AIF Regulations to bring more transparency in private equity business and regulations cover Venture Funds, Private Equity and Hedge Funds under various categories.