IL&FS arm plans $1 bn realty fund

IL&FS Investment Managers (IIML), the publicly listed private equity arm of Infrastructure Leasing & Financial Services, is planning to launch a $1 billion real estate fund.

The company's second realty fund is likely to be called IL&FS Realty Fund-II and would be launched by October this year. The Mumbai-based company would be tapping investors in the US, Europe and West Asia for raising nearly $1 billion, sources said.

The life span of the fund would be eight years and it will be registered in Mauritius. The firm has already started working on its second realty fund and has informed its current shareholders about its intentions to launch the second fund.

The fund would invest across all real estate categories. When contacted, an IIML spokesperson declined to comment.

IIML currently has an IL&FS India Realty Fund with a corpus of over $525 million. The fund, which was closed in April last year, is fully invested. It has also started raising funds for its third private equity fund, 'Tara India Fund-III'.

The company has appointed ICICI Bank for raising funds from HNIs (high networth individuals).The corpus would be close to $400 million and this would be raised from West Asia, Europe and US.

Yesterday, IIML and Milestone Capital Advisors launched IL&FS-Milestone Fund-I. This yield-driven real estate investment fund would raise Rs 1000 crore and is registered by SEBI.

"The fund would invest in IT & ITES buildings, hotels, hospitals, warehouses and shopping malls across India," said Ved Prakash Arya, managing partners for IL&FS Milestone Fund.

"IL&FS-Milestone Fund-I is the first real estate investment fund in India to offer a low minimum investment commitment of Rs 10 lakhs for individuals and Rs 1 crore for corporates. This is especially attractive for individual investors who want to diversify their portfolios without the complication of investing in real estate directly," Shahzaad Dalal, vice chairman and managing director of IL&FS Investment Managers said.

Standard Chartered and IIML have also entered into a 50:50 joint venture to mobilize a $1 billion through an India-focussed infrastructure private equity fund.

IIML, one of the country's largest domestic private equity fund management companies, manages over $900 million on behalf of leading Indian and international institutions.

PILING UP

The company's second realty fund is likely to be called IL&FS Realty Fund-II

IIML currently has an IL&FS India Realty Fund with a corpus of over $525 million

The company would be tapping investors in the US, Europe and West Asia

The life span of the fund would be 8 years and it will be registered in Mauritius