LIC holds a first close of real estate fund at $47m

Launched late last year, the fund has a target size of INR5 billion and is managed by LIC Housing Finance Asset Management.

Institutional investors including banks and corporates have participated in the fund, which has a target net IRR of over 22%. The fund will invest in urban properties such as mid-income housing projects, IT parks and warehouses across tier I and II cities.

"There is a huge demand for mid-income category homes in the range of INR1,600-4,000 ($30-75) per square feet and we will target such opportunities," VK Sharma, chief executive of LIC Housing Finance, told The Economic Times.

Sharma added that he hopes to finish fundraising by June by targeting institutional investors.

"Retail investment in private equity is yet to pick up. Small retail investors do not understand the risks and rewards associated with the business," Sharma said.

The Indian real estate sector is increasingly receiving attention from PE investors. Last month, Jones Lang LaSalle's (JLL) India CEO Sanjay Dutt reportedly left his role at the global property consultancy to launch a real estate fund with a former Merrill Lynch executive. The two are planning to raise INR3-4 billion.

Earlier in January, India Infoline Venture Capital Fund, the venture capital arm of the India Infoline Group (IIFL), also raised an INR5 billion real estate fund. It was the brokerage's first foray into the private equity business.

Red Fort Capital, an India-focused private equity real estate fund, also reached a final close recently on its second real estate fund, amassing $500 million from overseas investors. Last December, Kotak Realty Fund raised INR5.23 billion from domestic LPs for a fund that will provide high-yield debt instruments to real estate developers.

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• Topics
• South Asia
• Real estate
• Fundraising
• India
• Real estate
• Fundraising