Chicago-based real estate focussed private equity fund Walton Street Capital LLC has revived plans to raise its first India specific real estate fund, two sources privy to the development told VCCircle.
The amount being targeted to be raised in the new fund could not be immediately ascertained. But, in August 2008, Walton Street’s India arm had planned to raise a $1 billion fund to invest in the country’s real estate market. It was expecting to close the fund by March 2009. It would have been Walton Street’s first India-focused fund and aimed to invest in the affordable housing segment- one of the hottest residential property category in 2008. After the global meltdown its plans were cocooned and the fund never took off.
A slew of other realty funds have been looking to raise India-focused funds worth $500 million and the proposed fund from Walton could be in the same league.
One of the persons close to the development said, “Walton is already out in the market trying to raise the fund.”
Walton Street’s first investment in the country was in a Kolkata-based project of Shriram Properties called Shriram Hi-Tech in 2007. It had picked 33 per cent stake for Rs 100 crore with a similar investment coming from another US-based private equity firm Starwood Capital in the project.
Even after five years of investment the project has failed to take off and last year, the project level investment was swapped by both PE players for an enterprise level stake in the company Shriram Properties. The realty focused fund has investment in the US, Mexico and India.
Apart from the private equity fund’s presence in the country, a consortium of senior real estate executives in the United States, most of whom are principals of Walton Street Capital, LLC back a Bangalore-based professional project management firm called Fusion India Project Management.
According to its website, since starting in 1994, affiliates of Walton Street Capital have received total equity commitments of $5.7 billion from public and corporate pension plans, foreign institutions, insurance companies and banks, endowments and foundations, trusts and high net worth individuals. Affiliates of Walton Street Capital have invested and/or committed to invest approximately $4.5 billion of equity in approximately 180 separate transactions.
A slew of Indian real estate-focused private equity firms are gearing up to raise close to $5.3 billion, either in fresh funds or in follow-up funds, according to VCCircle estimates. This suggests a revival of fundraising plans by investment firms who lay quiet after the slowdown hit the realty market in 2008. However, analysts say that in spite of many successful exits recently, the going would be tough for fresh fundraising and only about a quarter of the estimated amount would make it from the drawing boards.
More on that here.