VCCircle

Indian real estate fund FIRE Capital Fund Pvt Ltd is all set to announce the first closing of its $500 million fund. This is the second fund of the Gurgaon-based real estate investment firm. The first closing will be made at $200 million, a top official said.
Though this fund will be real estate centric, it will also look at investing in new areas such as logistics, hospitality, hotels, entertainment and commercial real estate. The company is also keenly looking at infrastructure. "We would be increasing the number of our investors for this fund, who are mainly US-based entities such as financial institutions, family offices and HNIs," Om Chaudhary, CEO, FIRE Capital Fund, told VC Circle in an interview.
Before starting FIRE Capital, Chaudhary was a partner at Feedback Ventures, a project development consultancy firm. He has been involved in the development of real estate projects, from conception to commissioning for over 10 years.
"Our strategy is to form a joint venture with a small or mid-sized local developer where the developer brings the land and we bring the capital," he added. Commenting on fundraising on the current environment he said: "Fundraising has never been easy, especially for real estate." He also added that in the current macro environment developers will also be much more realistic about prices and this scenario provides opportunity funds such as FIRE Capital. The fund currently has a team of 30 people and plans to expand up to 70 after its second fund is closed.
The size of their first fund was $121 million, which could go upto $250 million with co-investments. So far the company has invested $150 million across seven projects in Indore, Chennai, Bangalore, Jaipur, Nagpur, Bhubhaneswar and Dehradun.
"All of these are integrated townships in emerging cities with the largest of them being 1,000 acres. Bulk of these are targeted at the middle-level segment," added Chaudhary. "We tie up with one of the top five players in the region and our strategy is to focus on emerging developers because we believe 90 per cent of the market is there."

Going To Tier II
The fund's strategy is to invest in tier-II cities. "We believe that as India grows, the growth will not only be in metros. Also in these cities there is aspiration with people to stay in an integrated township setup. The supply in these cities of such townships is low and we plan address that demand-supply gap," said Sanjeeva Shivesh, Executive Director at FIRE Capital. Expanding on the fund's approach, he said that they have built a niche in the integrated township segment. "We are also very selective about our investments. Out of 100 proposals we get, we invest in one," Shivesh added.
"Rather than partnering with national players we partner with players who are local DLFs and help them become their regional DLF." He further added that local developers know their market very well and have the requisite connections to execute and sell the project.
The fund's first investment, a 136-acre integrated township in Indore called 'Silver Springs' is expected to finish its first phase by Diwali this year and have first wave of people moving into their houses.