Saffron plans bouquet of PE funds

Despite the global slowdown and falling markets worldwide, Indian fund managers are increasingly launching India-dedicated property funds, which target 20-25 per cent returns here.

Saffron Asset Advisors, which manages the real estate investments of NYSE Euronext-listed Yatra Capital, is now planning to launch a bouquet of funds focusing on India.

The company is aiming at a total corpus of Rs 4,000 crore in the next couple of years.

Starting from real estate, the company will launch sector-specific funds such as healthcare, logistics, infrastructure, hospitality and so on.

The company has already launched Saffron India Real Estate Fund-1 and done its first closure of Rs 300 crore with Standard Life of United Kingdom. The company is planning to invest the amount in the next two months.

The company has plans to close the Rs 2,000 crore offshore fund by September this year, said Ajoy Veer Kapoor, managing director of Saffron Asset Advisors.

The fund will invest in hotels, warehouses, residential apartments and commercial offices across the country. The fund is looking at returns of 20 per cent, Kapoor said.

The Mauritius-based fund has a term of eight years and minimum investment threshold of Rs 40 crore.

"There is a good demand for fund focusing on Indian opportunities. With the fund, we can offer a diversified portfolio to our investors. Many investors are looking at emerging markets such as India to reallocate their portfolio,'' he said.

Kapoor said once the property fund is fully invested, the company would launch sector-specific funds in late 2009. Saffron is planning to launch Rs 300 crore domestic real estate fund, which will invest in non FDI-compliant projects in the country.

The company also has plans to launch a Rs 1,000 crore infrastructure fund, a Rs 600 crore logistics fund, a Rs 400 crore hospitality fund and a Rs 1,000 crore healthcare fund among others.

Asked about how the company will mop up funds during the ongoing credit crunch, Kapoor said, "The business institutions are ready to give you the cash. We think it is right time to launch funds as developers are giving better realistic valuations."

Yatra has invested nearly Rs 961.80 crore in the Indian property market, mainly in tier-II and III cities.

Recently, New Delhi-based Red Fort Capital announced the launch of its second offshore fund, with a corpus of Rs 3200 crore, to invest in Indian real estate.

Red Fort has also launched a Rs 1,000 crore domestic property fund. South Africa's Old Mutual and Mumbai-based ICS have floated a Rs 2,000 crore property fund, Triangle India Real Estate Fund.