India Infoline raises Rs 750-cr realty fund

IIFL Wealth Management also has an option to co-invest Rs 500 crore more under the fund

IIFL Wealth Management, a unit of financial services firm India Infoline, said on Wednesday it has raised a Rs 750-crore real estate fund, which has the option to co-invest another Rs 500 crore under the fund. IIFL has mandated Ajay Piramal group's realty fund manager Indiareit Fund Advisors as the investment advisor.

The fund, the IIFL Income Opportunities Fund - Series Special Situations, was launched in August 2013 and it is the third fund under the alternative Investment fund (AIF) norms floated by the Securities and Exchange Board of India (Sebi).

The company said the fund would invest in residential properties. The fund is a close-ended one with four-year tenure and has an 18-month deployment period.

RAISING NEW FUNDS

• ndiareit closed Rs 1,000-crore rupee fund; looking for first close of offshore fund in April
• ASK did the first close of $50-million offshore fund
• IIFL raises Rs 750-crore realty fund
• Milestone Capital to launch Rs 500-crore fund soon
• Essel Finance, Red Fort to launch new funds

The fund is targeting gross returns of 22-24 per cent and an equity commitment of Rs 50-75 crore per transaction.

Some other fund houses, too, have either raised or are raising new funds.

Indiareit, which recently raised a Rs 1,000-crore domestic fund, is looking to mark the first close of its $75-million offshore fund by April this year. For the first time, it is tapping institutions for its offshore fund.

Wealth manager ASK group had recently announced the first close of $50 million for its $200-million offshore real estate fund. The fund, which is managed by its Singapore arm, will invest in real estate projects in Mumbai, Pune, Chennai and Delhi. ASK is looking at final close by March 2015.

Mumbai-based Milestone Capital is also gearing up to launch a Rs 500-crore rental yield fund, which will invest in commercial properties.

According to sources, Essel Group’s financial services arm, Essel Finance, and Red Fort Capital are also raising offshore funds.

“Fund-raising environment would be better in 2014 as larger risks are behind us,” Sunil Rohokale, managing director and CEO of ASK Group, had told Business Standard recently, adding that the group was looking to invest Rs 500 crore in real estate projects this year. “Both the US and Europe are improving and the Middle East (West Asia) has always been doing well. So, investors in these parts of the world want to diversify,” Rohakale had said.