IIFL arm eyes $500 mn real estate credit fund

MUMBAI: IIFL Investment Managers, the wealth and asset management business of IIFL Holdings Ltd, is launching its latest real estate debt fund with a target corpus of almost $500 million, said a senior executive of the firm.

“We are launching a new real estate credit fund that will focus on the affordable housing space. We are launching the fund this week. We are targeting to raise $500 million for this fund,” said Karan Bhagat, MD and CEO, IIFL Investment Managers.

Given the change in regulations under RERA (Real Estate Regulation and Development Act), which calls for developers to hold more liquidity at the project level, the fund is structured to deliver 50% returns front-end through regular coupon payments and the remaining will be rear-ended, Bhagat said.

The latest real estate-focused fund from the firm will target to deliver a post tax, post expenses return of over 16% to investors, Bhagat added.

IIFL Investment Managers has raised close to ₹4,700 crore since 2012 across various real estate funds under Sebi’s alternative investment fund regime.

“The new real estate fund has already received strong anchor investment commitments, including a $25 million commitment from Fairfax and another large commitment from a wellknown high net-worth individual (HNI),” said Bhagat.