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IDFC Alternatives raises $123M for maiden domestic realty fund

20 March, 2014

Private equity firm IDFC Alternatives has raised Rs 750 crore ($123 million) under IDFC Real Estate Yield Fund, its maiden domestic realty fund focused on the residential real estate segment in India.

The firm said it raised the corpus within 10 weeks.

VCCircle was the first to report last December that IDFC Alternatives is hitting the road to raise its maiden domestic real estate fund.

The fund is targeting residential projects which are under construction across the top six cities (Delhi, Mumbai, Chennai, Bangalore, Hyderabad and Pune). It is a focused debt fund with a medium-term horizon and has already committed Rs 123 crore across two residential projects in Pune and Bangalore.

MK Sinha, managing partner & CEO, IDFC Alternatives, said, “This is our first real estate fund and we feel confident about its performance. The real estate sector is going through a tough phase in the backdrop of a market slowdown and most developers are stretched with reduced cash flows. This is the right time to plough money into the sector and structure transactions that will provide high yields going forward.”

Ritesh Vohra, partner – Real Estate Investments, IDFC Alternatives, said, “This fund has some key differentiators – it is a focused debt fund that targets a regular distribution of income to investors. The fund would be invested in ‘on-going’ residential projects to mitigate execution related risks. It has a lower risk profile given the secured nature of underlying investments and has been designed to be an investor-friendly product.”

A string of PE investors has managed to raise funds to invest in Indian real estate. Indiareit, Jones Lang LaSalle India, ASK Group among others have raised capital from both onshore and offshore markets.

Early this month, Motilal Oswal Real Estate, the real estate arm of Motilal Oswal Private Equity, made the first close of its second real estate dedicated private equity fund at Rs 225 crore ($36 million). The fund is looking to raise Rs 500 crore, including a green-shoe option of Rs 200 crore.

(Edited by Joby Puthuparampil Johnson)


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IDFC Alternatives raises $123M for maiden domestic realty fund

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