Edelweiss realty fund invests Rs 1,550 cr in projects in Mumbai, NCR

The new real estate fund of Edelweiss Group has deployed Rs 1,553 crore across different projects of property developers in Mumbai and the National Capital Region (NCR).

The Real Estate Credit Opportunities Fund of Edelweiss Alternative Asset Advisors (EAAA) did an initial close in November last year and a final close on May 7 this year. The fund has a size of Rs 1,743 crore, according to a quarterly report of the fund manager accessed by Business Standard.

The fund has invested Rs 380 crore in NCR’s BCC Group, Rs 356 crore in Mumbai’s Ruparel Group, Rs 291 crore in Naman Group, Rs 126 crore in Spark Developers, Rs 95 crore in Wadhwa Group, among others. The investments have been made in the projects of these developers. The investments are structured debt deals, with expected internal rate of return (IRR) of 16-19.7 per cent. The investments were made before the lockdown was announced. “The undisbursed amount of Rs 190 crore is expected to be distributed over the next two-three quarters to be utilised towards future project expenses,” said the fund manager.

An email sent to Edelweiss did not elicit any response till the time of going to press. The close-ended fund has a tenure of four and a half years.  “We do not foresee an adverse impact on the deal IRRs on account of Covid-19. However, the immediate loan servicing by the project could be impacted due to delayed cash flows,” said the fund manager in the document. 

Another fund manager Motilal Oswal Real Estate (MORE), part of Motilal Oswal Private Equity, earlier this year did the final close of its fourth real estate fund. Titled India Realty Excellence Fund IV of Motilal Oswal, it received commitments aggregating to Rs 1,150 crore. MORE has committed Rs 550 crore in nine investments in Chennai, Pune, Hyderabad, and Ahmedabad from this fund.

In November, Edelweiss Group announced a partnership between EAAA and South Korean financial services firm MERITZ Financial Group to launch the first fund of the project completion financing platform set up by Edelweiss. The first fund of this platform is targeted to be of $425 million. The platform is set to raise $1 billion over the next 12 months.