IDFC raises debut India real estate fund
IDFC Alternatives has reached a final close of INR7.5 billion ($123 million) on its debut India real estate fund.
The fund, which targets residential projects under construction in Delhi, Mumbai, Chennai, Bangalore, Hyderabad and Pune, took less than three months to secure commitments from domestic investors. A total of INR123 million has already been committed across two projects in Pune and Bangalore.
The fund is a focused debt vehicle structured so that it can make regular distributions to investors. It also seeks to minimize execution risk by only investing in projects that are already under construction and working with established developers.
"The real estate sector is going through a tough phase in the backdrop of a market slowdown and most developers are stretched with reduced cash flows," said M.K. Sinha, managing partner and CIO of IDFC Alternatives. "This is the right time to plough money into the sector and structure transactions that will provide high yields going forward."
IDFC Alternatives is the alternative asset management vertical of IDFC with more than $2.2 billion under management across private equity, infrastructure and real estate strategies. The firm's second India infrastructure fund reached a first close of $644 million in September 2013 after just eight months in the market and is on course to reach its $1 billion hard cap.
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