Motilal Oswal Real Estate raises Rs 500 cr for investment

Private equity firm Motilal Oswal Real Estate has raised Rs 500 crore which will be used for investments in realty projects.
The company, the realty arm of Motilal Oswal Private Equity, today announced the first closure of its recently launched real estate fund - India Realty Excellence Fund III (IREF-III), at Rs 500 crore.
"The fund, launched in November 2015, with a target of raising Rs 1,000 crore has been able to raise Rs 500 crore in a quick time span of 3 months," Motilal Oswal Real Estate said in a statement.
The new fund, with a tenure of five years from final close, will target a gross internal rate of return (IRR) of 23-25 per cent from its investment.

The company has already started committing money from its third fund.
The second fund (IREF-II), with a corpus of Rs 500 crore, was raised in 15 months and closed in March 2015. Total asset under management now stands at Rs 1,500 crore.

"Real estate vertical has become one of our key vertical within the overall private equity business. Motilal Oswal Private Equity now manages more than Rs 3,000 crore across 5 funds spread across growth capital and real estate," said Vishal Tulsyan, MD & CEO, Motilal Oswal Private Equity Investment Advisors.
Indirect investing would be the preferred investment route of the company, given the current market scenario.

"We plan to undertake mezzanine transactions with established developers across top Indian cities and are focused to generate superior risk adjusted returns for our investors," said Sharad Mittal, Director and Head, Real Estate Fund, Motilal Oswal Real Estate.
Further, the company has announced its first complete exit from Mahaveer Developers in Bengaluru. IREF-II had invested Rs 40 crore for their two projects in Bengaluru in March 2014 and exited this investment at an IRR of about 30 per cent.
The company recently invested Rs 58 crore in Kolte Patil Developers in Pune and Rs 56 crore in Skylark Mansions in Bengaluru.

Entire capital raised for the second fund has been committed and invested in ATS Infrastructure, Shriram Properties, Rajesh Lifespaces, Ahuja Constructions, Casa Grande, Kolte-Patil Developers, Mahaveer and Skylark.