Motilal Oswal PE to set up real estate fund

"The fund will look at institutional investors because the new alternate investment fund guidelines have raised the minimum ticket size for investments to INR10 million from INR2.5 million," Harvesp Mehta, director of real estate at Motilal Oswal Private Equity, told Live Mint. "It would be difficult to rely solely on high-net worth investors."

The new vehicle will target residential projects in large cities such as Mumbai, Chennai, Bangalore, Pune and National Capital Region (NCR).

This will be Motilal Oswal's second attempt to raise capital for property investments. In 2008, it launched the India Realty Excellence Fund, reaching a final close of INR2 billion the next year. The vehicle has reportedly made six investments and will invest its remaining capital - around INR2-3 billion - in the next few months.

India's real estate space has been a key focus for private equity investors keen on targeting debt-laden developers that require capital at a time when banks are cautious about lending. This has led to several spin-outs from larger firms.

Earlier this month, Ramesh Jogani, CEO and managing director of Indiareit Fund Advisors, an Indian real estate fund operated by Piramal Healthcare, reportedly left the company to start his own fund. Last November, Naresh Naik, managing director at Morgan Stanley's real estate arm, also quit to set up his own fund.

This week, ASK Property Investment Advisors, the real estate private equity arm of ASK Group, invested INR770 million in Indian developer Sushil Mantri's semi-luxury residential project. The investment was channeled through its second fund - ASK Real Estate Special Opportunities Fund II.

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• Topics
• Fundraising
• South Asia
• Real estate
• India
• Real estate
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• Motilal Oswal Private Equity