Sameer Sain, who parted ways with Kishore Biyani-led Future Capital Holdings (FCH), plans to list assets held by his retail-focused private equity fund to give investors an opportunity to exit. Everstone Investment Advisors, set up by Sain after the split with Biyani, is exploring options to float a real estate investment trust (REIT) and list it on the Singapore Stock Exchange (SGX), a company executive said. REITs are tax-free instruments, in which the majority of profits are distributed in the form of dividends.
Everstone is also considering options to dilute stakes in mall projects held by the Rs 350-crore Kshitij Venture Capital Fund.
“We have fully invested the Kshitij fund and are now looking at exits in some of our real estate projects. We may float a REIT and list it abroad, or float a retail real estate company in India and list it,”’ said Sain, managing partner with Everstone.
Kshitij, which was raised in mid-2005, has invested in 10 malls so far, out of which Ahmedabad, Indore and Baroda are complete. The fund was raised from domestic financial institutions and high networth individuals (HNIs).
“In the next 12-18 months, it will be clear where we will proceed. A few more assets may come onstream by then,”’ said Ashutosh Lavakare, chief financial officer of Everstone.
Though the draft norms for real estate mutual funds (REMFs), which are considered similar to REITs have been formulated, REMFs are not allowed in the country. Indiabulls Real Estate and Ascendas are the two entities which have listed India-focussed REIT on SGX.
Sain, who co-promoted FCH with Biyani, got investment advisory as part of the split, while Biyani got retail financial services business.
Other plans
Sain said Everstone is also planning to a float $550 million (Rs 2,530 crore) Indivision India Partners 2 (IIP-2), the second PE fund after IIP-1. The fund floated in January and expects to close in the next 6-8 months, he added. Everstone has deployed 80 per cent of IIP-1 in 16 companies such as kidswear retailer Liliput, processed food firm Capital Foods, construction company BE Billimoria, among others.
IIP-2 will invest in infrastructure enablers such as wind energy companies, pre-engineered buildings, construction companies and so on, said Sain.
The second PE fund will also look at more buyouts and have bigger investment thresholds, Lavakare said. For instance, IIP-2 will look for deals of $35-$40 million, compared to IIP-1, which invested in the range of $20-25 million, he added.
Everstone is also looking at raising a real estate fund in 2011. Apart from IIP-1 and Kshitij, Everstone manages $350-million Horizon International Realty Fund and Indospace Logistics Partners, which invests in logistics ventures.
