Reliance Capital raising up to $163M realty fund

Reliance Capital Asset Management (RCAM) has launched a new real estate fund under Alternative Investment Fund (AIF) norms - Reliance Yield Maximiser Alternative Investment Fund Scheme I (RYM AIF) – with a target of corpus of up to Rs 1,000 crore ($163 million).

Launched thorough RCAMs 100 per cent subsidiary Reliance AIF Management Company Limited (RAMCL), the fund has an immediate target of Rs 500 crore with a green shoe option of further Rs 500 crore.

It seeks to invest in high yield generating securities issued by companies participating in residential real estate sector.

“We plan to scale up our AIF presence and plan to raise over Rs 5,000 crore under AIFs alone in next three years,” said Sundeep Sikka, CEO, RCAM.

The company said that it plans to raise Rs 5,000 crore through different funds under AIF route in the coming three years. So far, it has raised and deployed over Rs 1,200 crore across real estate properties under a different strategy.

RYM AIF fund is a 54-month closed-ended real estate focused fund and aims to generate an IRR of 20-24 per cent on the underlying investments.

The announcement has come at a time when real estate is seeing renewed interests from domestic and foreign investors with several firms raising domestic as well as offshore funds.

RCAM also joins a host of companies which are out in the market to raise money. ASK Property is raising its first offshore fund with a target of $200 million, of which $50 million has already been achieved.

Essel Finance is putting final touches to its plan to launch an offshore fund and may announce it soon. Amplus Capital, which raised funds from domestic investors in its first outing, is mulling to tap international market for its second fund. Home-grown company Milestone Capital is out in the market to raise a Rs 500 crore realty fund from domestic investors.

Biggest event to watch out for in the fundraising space is the third fund of Red Fort Capital which aims to scoop up $750 million-$1 billion.

RCAM is the asset management arm of financial services major Reliance Capital, a part of the Anil Ambani-controlled Reliance Group (earlier Reliance ADAG).

Reliance Capital is not new to private equity investing. One of its arms Reliance Equity Advisors also runs a sector agnostic PE fund. However, as first reported by VCCircle, this unit is in the midst of changes.

Separate reports hint that the top management team at this PE arm will independently run the show, leading to a spin-out as it’s known in industry jargon.

(Edited by Joby Puthuparampil Johnson)

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