Motilal Oswal Real Estate (MORE), the property investment arm of Motilal Oswal Group, has hit the second close of its fourth fund at Rs 850 crore ($124 million).
The firm raised the capital for the India Realty Excellence Fund IV mostly from high-net-worth individuals and family offices, it said in a statement.
The fund has a target corpus of Rs 1,500 crore. It had hit the first close in September last year.
The latest fund will follow a similar strategy as its two predecessor funds--IREF II and IREF III. It plans to deploy the capital in mid-income and affordable housing projects across the top six cities in India while selectively also investing in commercial projects.
The latest fund has already committed Rs 250 crore across four projects in Chennai, Pune and Hyderabad.
“We have scaled up the real estate private equity business by more than 10 times in the past five years,” said Vishal Tulsyan, managing director and chief operating officer, Motilal Oswal Private Equity. “The sector is at the cusp of transformation led by regulatory reforms, and investing in this segment shall continue to be our focus in the coming years.”
Sharad Mittal, director and chief operating officer at MORE, said that the firm raised the capital within eight months of launching the fourth fund and that it saw repeat commitments from existing investors in its previous funds.
Mittal said that the firm’s strategy of backing large developers for mid-income and affordable housing projects has worked well in the past and that it will continue to stick to this game plan.
The fund house has recorded exits worth Rs 1,000 crore from 13 investments in the past two years.
The firm is looking at a strong pipeline of deals and aims to exhaust its latest fund's corpus by the end of March 2020.
“While the deal flow has increased significantly over the last few months, looking at the current market scenario, we are being very cautious and selective in our investments,” Mittal said.
The real estate investment firm's cumulative assets under management stand at more than Rs 3,000 crore. Over the years, the firm has invested in projects of Chennai's Casagrand Group, Bengaluru's Shriram Properties, Phoenix Group of Hyderabad and Kolte Patil Developers of Pune. It has also invested in projects of ATS Group in Delhi-NCR and Mumbai's SD Corp.
