Motilal Oswal hits 1st close of realty fund at ₹650 cr
Motilal Oswal Real Estate (MORE), the realtyfocused private equity arm of Motilal Oswal Financial Services Ltd, has clocked the first close of India Realty Excellence Fund V (IREF V), its fifth real estate fund.
Launched with a target corpus of ₹800 crore, the fund has received commitments of around ₹650 crore. The remaining capital will be raised over the next couple of months, MORE said in a statement on Thursday.
The new fund has been raised from high-net-worth individuals (HNIS) and family offices, and it has been set up as an alternative investment fund (AIF Category II).
IREF V will focus on providing senior secured debt in postapproval projects and it plans to deploy the capital in mid-income or affordable residential projects across top seven cities, while also investing in select commercial projects.
IREF V plans to execute 12-15 transactions over its entire fund life. Till date, MORE has funded 89 projects via 68 investments and exited 33 investments.
With IREF V, MORE’S cumulative assets under management (AUM) will cross ₹4,400 crore. MORE is a part of Motilal Oswal Private Equity, the alternative investment platform of Motilal Oswal Financial Services.
“We believe that the realty sector is currently at an inflection point. With this fund, our cumulative private equity AUM has crossed $1 billion and real estate forms a key part of that AUM,” said Vishal Tulsyan, managing director and chief executive officer, MOPE.
He added: “We will continue to strengthen our position as a real estate investor by capitalizing on such diverse opportunities over years to come.”
MORE has concluded its first investment from IREF V with Shriram Properties Ltd in Bengaluru, with a commitment of ₹40 crore.
It is also weighing other potential deals.
“There has been a huge gap in construction finance available in the sector over the last two years pursuant to the nonbanking financial companies crisis and now the Covid-19 pandemic,“he said.
The real estate sector has gathered a lot of momentum in the last six-seven months on the back of bottomed-out prices, peak affordability, historically low mortgage rates, government incentives and increasing emotional value of home-ownership during the pandemic. Several developers have clocked record sales in the last two quarters of FY2021.
However, liquidity is still a concern which is where this fund will help our developer partners,” said Sharad Mittal, director and chief executive of MORE.