Axis Asset Management Company Ltd has hit the final close of its maiden real estate fund at Rs 400 crore ($58 million), the Axis Bank unit said on Tuesday.
The Axis RERA Opportunities Fund–I raised capital from domestic institutions, high-net-worth individuals and Axis AMC, the sponsor of the fund, it said in a statement.
The asset manager said that it is looking at making structured debt investments in top eight cities of the country.
The development comes more than a year after VCCircle first reported that Axis AMC was planning to venture into real estate funding through an alternative investment fund.
Balaji Rao, managing partner for real estate at Axis AMC, said the property market has been going through tough times over the past few months with developers facing a liquidity crunch and a change in their business models due to new regulations. However, this is the opportune moment for value investors to identify and back real estate companies that can deliver results in these new conditions, he said.
Rao said real estate is an important asset class for investors. Demand for mid-income and affordable housing will likely continue to rise, backed by strong support from the government and increasing incomes, he added.
With its maiden fund, Axis AMC joins a host of financial services companies which have exposure to the real estate market in India. Motilal Oswal Real Estate, the property investment arm of Motilal Oswal Group, has raised four funds. Recently, it invested in a project of Chennai-based developer Radiance Group.
Kotak Realty Fund, which has several funds under its kitty, recently launched funds focused on commercial and affordable housing projects in the country. ICICI Bank, Piramal Group and Aditya Birla Group, too, have presence in the segment through real estate funds and sector-focused non-banking financial companies.
Axis AMC offers a bouquet of asset management products across mutual funds, portfolio management services and alternative investments. The AMC is backed by Axis Bank, India’s third-largest private-sector bank, and Schroders Plc, one of the world’s largest asset managers based in the UK.