Indiabulls’ PE Unit Looking to Raise ₹ 1,500 cr in Realty Fund
Co’s maiden commercial fund to have a tenure of 5 years with an option of 2 extensions of 1 year each
Mumbai: Indiabulls Asset Management Company’s private equity arm is looking to raise ₹ 1,500 crore through its new real estate fund Dual Advantage Commercial Asset fund (DACA), said a top company official.
This is Indiabulls Asset Management’s maiden commercial property fund after raising two residential real estate funds totalling ₹ 1,500 crore over the past two years. The new fund will have a tenure of five years with an option of two extensions of one year each. The company is looking to raise the total corpus, including co-investments of .₹ 500 crore, through institutional investors, HNIs and family offices.
“We believe this is a good time to enter the commercial property market, given that most office markets are in the rental growth phase and the next 3-5 years will see robust rental and capital value appreciation through cap rate compression. Indiabulls Dual Advantage Commercial Asset Fund is a lo- ne, Chennai and Hyderabad.
“Our commercial investment strategy intends to provide downside protection through recourse to completed asset, returns through existing rental yields and capital appreciation on exit. The fund will target to achieve higher returns by implementing various strategies like the opportunity to bring rentals to market parity, repositioning asset to achieve higher rentals and innovative leverage and tax structures to plug leakages.” said Ambar Maheshwari, CEO — Private Equity, Indiabulls Asset Management Company.
The fund will be targeting gross pre-tax internal rate of returns in the region of 1617%. The average ticket size for investments through this fund will be in the range of ₹ 100 crore to ₹ 200 crore. The fund will look at commencing its exits from investments from the fourth year following the conclusion of fund raising.
Indiabulls AIF is registered as a category II Alternative Investment Fund under the provisions of Securities & Exchange Board of India (Alternative Investment Funds) Regulations, 2012, and has been set up as a trust. The AIF platform has so far raised ₹ 1,500 crore and has deployed ₹ 1,000 crore across residential strategies.
The fund will also be raised through this platform. Indiabulls Group will be the sponsor of the fund and Indiabulls AMC will be the investment manager of the fund.