The Aditya Birla group is launching a $500-million Mauritius-based real estate fund that will target investments in India.
The fund, which is called the Aditya Birla India Real Estate Vision Fund, has been launched by the group’s asset management arm, Birla Sun Life Asset Management.
The real estate fund has a targeted corpus of $350 million and a greenshoe option of up to $150 million. The greenshoe option of the six-year fund is still open.
Sources in the Aditya Birla group confirmed the development.
The fund will invest in equity, equity-related and debt instruments of firms that develop real estate, including residential, commercial properties and retail malls.
“The fund will invest in unlisted real estate companies that primarily target the residential segment,” said Shashi Kumar, joint president and head of real estate advisory services at Birla Sun Life Asset Management.
Real estate circles said the Aditya Birla group had been trying to find investors for this fund for over six months.
During an investor presentation in July, the group had identified a fund targeted at the real estate sector as one of its future strategies to build the financial services business.
Several large corporate houses and banks have floated real estate funds in India that invest in realty companies and projects.
The Aditya Birla group is betting that this is the right time to target the realty sector.
“This is the best time to enter Indian real estate as the industry has matured, prices have already seen an upswing in Mumbai and it has become much easier to identify the real estate players a fund like ours should partner with,” Kumar said.
This fund will, however, not invest in AV Birla group projects, including retail.
“We are clear that our investment will be outside the group. The idea is to target residential space by partnering developers from the initial stage of acquiring land,” said Kumar.
He added that the fund might invest in commercial or retail projects if these were part of a project that was geared towards residential development.
Kumar said the fund would bring the Birla processes right from the due diligence stage to the table and domain expertise that would help it identify the right partners.
Tax firm Nishith Desai Associates advised the group in establishing the fund.
Source: The Telegraph