Motilal Oswal raises $71M for second realty fund, returns 77% of maiden fund

Motilal Oswal Real Estate (MORE), the real estate arm of Motilal Oswal Private Equity (MOPE), has raised Rs 440 crore ($71 million) for its second fund India Realty Excellence Fund II (IREF II) which has a target size of Rs 500 crore including a green-shoe option of Rs 200 crore, the company said in a statement.

IREF II is targeting mezzanine transactions which provide regular income through fixed coupon and a subsequent project linked upside. It is chasing investments in top five cities—MMR, NCR, Bangalore, Pune and Chennai.

The fund has already made two investments, one in MMR with Ahuja Developers and another in Bangalore with Mahaveer Group and is targeting to further deploy over Rs 300 crore over the next few months.

Simultaneously, the company has exited two of its investments from its maiden fund India Realty Excellence Fund (IREF). First exit is from a Bangalore project of Godrej Properties and second from a project of Xrbia Developers in Mumbai Metropolitan Region (MMR).

With this, the fund has exited three of its seven investments from the maiden fund and has returned 77 per cent of the fund corpus to its investors.

Vishal Tulsyan, managing director and chief executive officer, Motilal Oswal Private Equity, said, “We now manage assets worth over Rs 2,500 crore across our private equity and real estate funds.”

Sharad Mittal, director & head, Real Estate Fund, Motilal Oswal Real Estate, said, “Our exits have come in challenging times for the real estate sector which is a testimony to our commitment to generate superior risk adjusted returns for our investors through diligent underwriting and proactive asset management. Further, we are evaluating some interesting investment opportunities from our new fund across metros with reputed developers, in line with our investment thesis.”

The company's first realty fund IREF, launched in 2008, is a Rs 200 crore domestic fund focused on equity investments in real estate projects in top three cities in India - Mumbai, Pune and Bangalore.

(Edited by Joby Puthuparampil Johnson)

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