ASK Property Investment Advisors Pvt Ltd, the real estate investment arm of ASK Group, has raised Rs 1,000 crore ($157 million) for its third domestic fund to mark the first close, a top company executive told VCCircle.
The fund – ASK Real Estate Special Opportunities Fund II – was launched in October, 2014 with a target corpus of Rs 1,500 crore including a green-shoe option of Rs 500 crore. With the first close, the firm is now looking to exercise the green-shoe option with an aim to wrap up fundraising process in three months.
“We have raised 60 per cent of the capital from our existing investors. The fundraise comes in a record time of six months, as we have shown good track record on exit from our first and second domestic funds and returned money with a multiple in the range of 2.25-2.5 times,” said Sunil Rohokale, managing director, ASK Group.
With this fundraise, the assets under management of the firm have gone to Rs 3,000 crore.
It has so far drawn down 20 per cent of the corpus and committed another 20 per cent. It recently sealed its first deal with public listed firm Puravankara Projects Ltd for a Chennai project, where it invested Rs 110 crore for land purchase.
The fund is actively chasing investments in Bangalore, Mumbai, Delhi-NCR and Pune and will be sealing a deal in each city this financial year. The broader mandate of the fund is to invest in top six cities in India and selectively also look at distressed developers. It will have a portfolio of 8-9 projects with a ticket size of Rs 100-200 crore.
The fund typically ties up with developer partners at land acquisition stage and seals deals in the form of equity. ASK is one of a few PE players to have continued doing equity deals. Most of the realty focused funds have switched to debt or mezzanine transactions over the years to avoid risk associated with equity participation.
On the exit front, the company has returned Rs 1,000 crore to its limited partners (LPs) in the last five years across its first and second domestic funds. It has also charted out exit plans for the rest of the year and is looking at divesting at least three projects with an estimated internal rate of return (IRR) in the range of 25-30 per cent.
“We will be exiting two-three projects which are in advanced stage of construction and seen good sales volume. We expect the multiple to be in the range of 2.25-2.5 like most of our recent exits,” Rohokale said.
He did not share further details on the exit plans of the company.
Recently, ASK exited its over three-year-old investment in Pune-based Amit Enterprises at Rs 75 crore clocking a multiple of 2.53x. It also exited investment in another Pune project by Paranjape Scheme with a multiple of 1.8x in less than three years.
Earlier, it had exited its investment in ATS ONE Hamlet, a project of ATS Group in Noida, with a multiple of 2.45 and Liviano, a project by Darode-Jog Developers in Pune, with a multiple of 2.35 in just over three years.
The company is looking to invest roughly Rs 800 crore from its roster of funds in real estate. It has a dry powder of 15-20 per cent from its second domestic fund and has raised $50 million to mark first close for the maiden offshore fund.
The firm has so far sealed 16 transactions with 10 developers including ATS Infrastructure, Godrej Properties, Shriram Property and Puravankara.
(Edited by Joby Puthuparampil Johnson)