With the bullish market leading to new projects, realty funds are now in search of greener pastures. Availability of capital is one of the major constraints faced by property developers. While bank funding comes with strings attached, a number of private equity (PE) funds are eyeing the real estate market with the demand level picking up in many cities now. Most real estate investments across India are through PE funds, who prefer to invest at the entity or special purpose vehicle (SPV) level. Even a small player can access real estate funds for a longer tenure. Moreover, association with real estate funds provides credibility during IPOs. However, while domestic funds are catering to the demand of smaller projects closer to the city, FDI investment can only happen in the suburban and peripheral areas with the prescribed minimum threshold limit of 5 lakh sqft built up area. Industry sources estimates that there are 15 PE funds with a surplus of close to $300 million looking at potential investment of $5 billion in the domestic market. Though they prefer to invest in residential projects, some funds are keen on commercial and retail development projects, according to market sources. […]