BlackSoil Realty’s maiden fund invests $5M in Sheth Developers

BlackSoil Realty Fund, a private equity fund focused on residential real estate, has invested $5 million (Rs 30 crore) at company holding level in Mumbai-based Sheth Developers through mezzanine structure, the company said in a statement. This marks the debut deal of the company from its maiden fund. 

“This investment will act as proof of our focus and strategy and help us raise further funds for our other deals through co-investment structure,” said Mohinder Bansal, partner, BlackSoil Realty Investment Advisor LLP. 

He said the company plans to deploy the fund across five-six deals with an average transaction size of around Rs 20-40 crore each.

Promoted by Shashi Kiran Shetty, chairman and managing director, Allcargo Logistics, and Gnanesh Gala, managing director, Navneet Education Ltd, the model of the fund allows limited partners to co-invest in projects backed by BlackSoil. 

The fund, which is targeting to raise Rs 200 crore in addition to a green-shoe option of Rs 50 crore more, recently reached the fundraising milestone at Rs 125 crore (just over $20 million).

The fund has slightly tweaked its strategy since its inception a year ago. It began as a fund seeking investment opportunities in Mumbai, Ahmedabad, Bangalore, Pune and Chennai. But its focus has shifted to Mumbai now. “Real estate is a very local affair and it is not easy to understand the real estate dynamics of every city. As of now we have concentrated our focus on the suburbs of Mumbai as we understand the market in and out,” Bansal had informed VCCircle a few months ago.

Of late, real estate has seen a spike in transaction volume on the back of renewed investor sentiment. ASK recently struck the debut deal from its offshore fund and invested Rs 127 crore in a project by ATS. It also invested Rs 55 crore in a Pune township project by Paranjape Group. 

Tata Opportunities Fund invested roughly Rs 450 crore at enterprise level in Southern realtor Shriram Properties. North-based realtor Prateek Group raised Rs 100 crore from global investment firm The Xander Group.

(Edited by Joby Puthuparampil Johnson)

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