Indiabulls Alternative Investments is set to launch a Rs1000 ($150 million) realty fund from non-resident Indian (NRI) investors.
The India Opportunities Fund is a four-year real estate-focused, alternative investment fund (AIF). It will target high-yield opportunistic investments that includes both senior secured as well as mezzanine deals.
“From a market cycle perspective, given the recent developments in demand and supply, it is an opportune time to enter the residential real estate sector, as we’ve already started seeing robust demand in select cities/micro markets in India and where prices are expected to appreciate over the next three to five years,” a spokesman from Indiabulls told Real Estate Capital.
The fund will be invested into residential real estate projects across the top five or six cities in India and expects to raise NRI money, including from Persons of Indian Origin (PIO) and institutional investors.
The fund is looking to make an IRR of between 21 to 23 percent. The typical ticket size of each investment would be around Rs100 crore to Rs150 crore with a tenor of three or four years.
“There is a large base of foreign investors, both Non-Resident Indians including Persons of Indian Origin and institutional investors, who are keen to invest into Indian real estate but would prefer to invest indirectly using a professional fund manager thereby avoiding the exposure, risk, paperwork and asset management issues,” he added.
The new fund will be similar to the other real estate funds managed by Indiabulls, which comprise primarily debt and structured debt investments in under-construction residential projects across leading property markets.