Piramal Enterprises’ financial services arm Piramal Capital has combined its real estate private equity fund management business known as Indiareit and its real estate and allied sectors’ focused NBFC into an integrated vertical, targeting funding opportunities within real estate and allied sectors.
The integrated entity Piramal Fund Management will provide exposure to real estate across the entire capital stack—i.e. private equity, structured/mezzanine equity, structured debt, senior secured debt and construction finance.
VCCircle had first reported that such a move is afoot in February this year.
As a result, Piramal Capital, the financial services unit of the cash-rich diversified firm Piramal Enterprises, now has two entities—Piramal Fund Management and Structured Investments. The latter is co-headed by Jayesh Desai and Parvez Umrigar and largely chases structured finance deals in infrastructure.
“Integrating the debt and equity platform into a combined entity will ensure that we are best positioned to gain valuable information, skills and insights – all of which will enhance our ability to forge lasting relationships with our development partners,” said Ajay Piramal, chairman, Piramal Enterprises.
Piramal Fund Management strategy & management:
“In Indiareit, we invested multiple times in the project of a developer who also raised debt funding from our NBFC unit. Hence, we saw this as a great opportunity to integrate the units,” Khushru Jijina, managing director, Piramal Fund Management, told VCCircle.
“Earlier we were approaching same developer for debt and equity which did not make sense,” added Jijina, who was till now head of Indiareit.
Jijina is now head of the combined platform. Sudha Ravi, CEO for the NBFC, has moved to Indiareit as an executive director for debt and will report to Jijina.
A K Purwar, previous head of the NBFC unit Piramal Finance, will shift focus to Ajay Piramal’s private equity fund, IndiaVenture Advisors. Purwar, former chief of SBI, had joined the group as chairman of IndiaVenture Advisors as well as the NBFC unit. IndiaVenture Advisors is the pure play PE unit of the group, which operates separate from the realty PE arm.
The unit plans to discontinue plain vanilla debt funding in real estate under the combined entity even though the team will manage the existing loan portfolio worth Rs 2,000 crore. It has, however, added construction financing under its investment mandate.
“The people who were earlier in NBFC and Indiareit have been given individual responsibility according to geographies. There used to be two people in the same market; now we have divided the geographies under one team with one person heading it. This has been one of the smoothest integration we have ever had,” says Jijina.
Currently, Piramal Fund Management manages/advises funds worth over Rs 7,550 crore on the equity side, which includes five domestic funds, one offshore fund, three third-party mandates and a separate account with Canada Pension Plan Investment Board.
Additionally, it has disbursed Rs 3,000 crore as part of proprietary debt loan book. The combined team strength totals 60 professionals.
Piramal Fund Management will continue to approach the market with targeted fund offerings cantered on a specific strategy or set of opportunities, and act in fiduciary capacity to both third-party investors as well as to proprietary capital.
The combined entity has exhibited a strong investment momentum since integration was initiated, deploying another Rs 2,400 crore over the last three months.
“This reorganisation will facilitate engagement with our development partners to meet their funding requirements across the entire lifecycle of a project. We are uniquely capable of catering to the entire capital stack – right from early stage equity to late stage debt and are therefore able to act as perpetual providers of capital within this space,” Jijina said.
(Edited by Joby Puthuparampil Johnson)
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