Piramal Group and IIFL Wealth Management Ltd have joined hands to float an alternative investment fund (AIF), which will focus on the real estate market in the country.
The co-investment platform will fund realty projects that are at an advanced stage and need last-mile funding across Tier 1 cities in the country. The fund has a target corpus of Rs 2,000 crore ($282 million).
The market today presents many opportunities for last-mile finance across projects that require a minimum amount of gap funding for completion, Piramal said in a statement.
Khushru Jijina, managing director at Piramal Capital & Housing Finance Ltd, said the creation of this AIF is in line with the group’s strategy to build newer platforms for co-lending with liked-minded reputed institutions.
“We will initially seed the fund with existing loans from Piramal Group’s portfolio while continuing to explore quality deals from the market in the future,” he said.
Piramal Group has a track record of both primary development and wholesale funding in real estate. It also has a fiduciary fund management business across multiple funds and mandates structured, preferred and pure equity transactions.
IIFL Wealth has aggregate assets of around Rs 1,70,000 crores under management, advice, and distribution.
With this arrangement, Piramal will also be facilitating external capital (on a fund or co-investment basis) alongside its lending business. This will enable the group to continue to further grow the lending business through a new co-investment/co-origination model.
VCCircle recently reported that Piramal Capital & Housing Finance Ltd has hit the first close of a structured debt fund that would help it further diversify beyond the real estate sector. It hit the first close of the Piramal Alternative Opportunities Fund at Rs 115 crore.
Karan Bhagat, founder, MD and CEO at IIFL Wealth Management said the Piramal’s deep domain expertise in real estate and IIFL Wealth's ability to seize the best market opportunities have resulted in well-structured investment idea which will provide clients an ideal risk-adjusted return.
IIFL Asset Management has raised a cumulative AUM of Rs 7,000 crores across 8 real estate funds to date. Of which, it has fully exited the first two funds, generating gross IRRs of 18-22%.
As reported by VCCircle, IIFL recently hit final close of its latest fund at $300 million.
“We have raised $300 million (Rs 2,144 crore at current exchange rate) for our latest fund. Of which, we are raising roughly $100 million from offshore investors and the remaining from domestic limited partners (LPs),” said Abdeali Tambawala, fund manager, real estate, IIFL Asset Management.
