Singapore-based developer Assetz Property Group has acquired a stake in Avenue Venture Partners, a real estate private equity firm in Mumbai, to enter the fund management business.
Assetz and Avenue will jointly float a $150 million (Rs 1,000 crore) fund under the Assetz brand to be invested in warehouses as part of the tie-up, a senior executive at the Indian company told VCCircle. The executive didn’t give any financial details of the agreement between Assetz and Avenue.
The warehouse fund will seek to tap into the offshore market and has already initiated talks with prospective investors, the executive said. The capital raised will be deployed in projects of other developers. The warehouse fund will be followed by a commercial fund.
This will be the second fundraising exercise for Avenue Venture. It raised its maiden fund, Avenue Real Estate Fund, in 2013 to invest in residential projects.
Last year, Avenue Venture exited its two-year-old investment in a project of Assetz Property. The firm exited a residential project located in East Bangalore, which forms part of a 25-acre mixed use development called Marq.
In the realty fund management segment, Mumbai-based developer Godrej Properties Ltd recently created a funds management unit that has raised a $275 million pool of capital with Dutch pension fund asset manager APG Asset Management NV as the lead investor.
The unit, Godrej Fund Management, will advise investors in Godrej Residential Investment Program II on investments into a residential development platform with Godrej Properties in India. However, unlike the Assetz fund, Godrej’s first fund will invest in the company’s own projects.
Several large global asset management and pension funds have increased their exposure to the Indian realty market through the so-called platform deals where they directly collaborate with developers as opposed to backing a realty-focused fund.
A joint investment platform, which allows an investor to back a bunch of projects to be taken up by a developer, has emerged as an important tool of deal-making in real estate private equity.
Goldman Sachs recently sealed a platform deal with Nitesh Estates to develop commercial assets in the country. In the residential segment, Singapore’s sovereign wealth fund GIC has tied up with Brigade Group to develop projects in South India.
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