Indiabulls launching $162M realty fund, targets AUM of $1B by 2018

Indiabulls Asset Management Co Ltd, a subsidiary of Indiabulls Group, is coming out with a residential real estate focused fund with a corpus of Rs 1,000 crore (including a green-shoe option of Rs 500 crore) and aims to have assets under advisory worth $1 billion in three-four years, a top company executive told VCCircle.

The maiden fund will tap domestic investors to scoop up capital and invest in residential projects in top seven cities. It has shortlisted Mumbai, Pune, NCR and Bangalore as the destinations for investment and is finalising other cities.

It will deploy capital in the form of debt and lend capital to developers through non-convertible debentures.

“We have applied for licence to the market regulator and are awaiting the final approval. We should be able to officially launch the fund in January next year,” said Akshay Gupta, group executive head, Indiabulls Asset Management. Indiabulls Asset Management is part of Indiabulls Housing Finance.

Gupta was appointed as the head of asset management businesses in May this year.

The company aims to hit first close within six months. It is looking at a corpus of Rs 100-200 crore as the first close amount.

The company has appointed Amber Maheshwari as chief executive of AIF investment business, which is part of Indiabulls Asset Management. Maheshwari worked as managing director, corporate finance with Jones Lang LaSalle till recently.

Simultaneously, the company is also drawing plans to launch an offshore fund which will employ debt, quasi debt and equity structures to invest in projects. “We are certainly working on that but it is too premature to comment on the size of the fund,” Gupta said.

He said the company is very serious about this business and will make all the efforts to grow it bigger. “We aim to have assets under advisory worth $1 billion in a period of three-four years,” he added.

This development comes soon after Indiabulls went through management reshuffle. The three co-promoters of diversified Indiabulls Group carved the businesses into two halves with Sameer Gehlaut retaining bulk of the business including housing finance, securities, real estate & wholesale trading while Rajiv Rattan and Saurabh Mittal got sole control of power and infrastructure business.

Rattan and Mittal also gave up on the Indiabulls brand in the firms controlled by them, as part of a group restructuring.

A slew of realty funds have been launched in the recent past on the back of improving sentiments among limited partners. Recently, Ramesh Jogani, who moved out of Indiareit, tied up with Centrum Finance to launch a bulk-buying realty fund.

Six former employees of American banking giant Wells Fargo recently announced the launch of two realty fund with a total corpus of Rs 500 crore.

Other private equity firms out on the road to raise capital include ASK, Kotak, Essel Finance and Milestone Capital.

(Edited by Joby Puthuparampil Johnson)

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