The Townsend Group, a global investment management solutions firm, has invested in private equity giant KKR’s real estate focused non-banking financial company (NBFC) in India, the company said in a statement.
KKR had floated the NBFC in January this year with Singapore’s sovereign wealth fund GIC as the lead investor. The platform provides credit solutions for property developers across residential and commercial segments. It will engage in senior secured lending for funding developers.
Prashant Tewari, principal, Townsend Group, said, “The strong secular demand for middle market housing requires innovative credit solutions and long-term capital. The KKR NBFC platform provides our clients a thoughtful framework to execute in India and a strong investment partner with specialised, local market and property expertise.”
“This additional long-term capital allows the real estate NBFC to better fulfil a critical market need by assisting developers with solutions best suited to their needs. KKR continues the strategic build out of its real-estate financing platform, leveraging its local and global real estate expertise in structuring and underwriting real estate solutions,” said Sanjay Nayar, chief executive officer, KKR India.
With focus across real estate, infrastructure, timber and agriculture, Townsend seeks to benefit from the lack of long-term capital and strong urbanisation trends in an emerging market like India. As of December 31, 2014, Townsend had assets under management of approximately $12.5 billion and provided advisory services to clients which had real estate/real asset allocations exceeding $170 billion.
This is the second NBFC of KKR in India. Through its first, it expanded its capabilities to provide solutions across the capital structure. Since 2009, KKR has extended more than $2 billion of structured financing to 21 business groups in India through its credit and capital markets business.
It marked its entry in real estate last year with investments in Wadhwa and Bhartiya Group. While it has been active in India since 2006, it has ramped up its activity in realty space in the last one year. Since launching a dedicated real estate platform in 2011, KKR has committed over $1.8 billion of equity to 29 real estate transactions in the US, Europe and Asia.
Global investors have increased their exposure to Indian real estate space with GIC signing a platform deal with Brigade Group and a mega investment with DLF. KKR’s global peer Blackstone is one of the biggest owners of commercial space in India and is on the lookout to acquire more.