MORE announces 1st close of third real estate fund at Rs 500
Motilal Oswal Real Estate (MORE), the real estate arm of Motilal Oswal Private Equity has announced the 1st close of its recently launched Real Estate Fund – India Realty Excellence Fund III at Rs. 500 crore. The Fund, launched in November 2015 with a target of raising Rs. 1,000 crore, has been able to raise Rs. 500 crore in a quick time span of 3 months. The new fund, with tenure of five years from final close, will target a gross internal rate of return of 23-25% from its investments.
MORE has already started committing money from its 3rd fund. The 2nd fund (IREF II), with a corpus of Rs. 500 Crs, was raised in 15 months and was closed in March 2015. Total AUM under MORE now stands at Rs. 1,500 Crs.
Vishal Tulsyan, MD & CEO, Motilal Oswal Private Equity Investment Advisors said, “Real estate vertical has become one of our key vertical within the overall private equity business. Motilal Oswal Private Equity now manages more than Rs. 3,000 Crs across 5 funds spread across growth capital and real estate”
“Indirect investing should be the preferred investment route given the current market scenario. We plan to undertake mezzanine transactions with established developers across top Indian cities and are focused to generate superior risk adjusted returns for our investors” said Sharad Mittal, Director and Head, Real Estate Fund, Motilal Oswal Real Estate (MORE).
Further, MORE has announced its 1st complete exit from Mahaveer Developers in Bangalore. IREF II had invested Rs. 40 Crs for their two projects in Bangalore in March 2014 and has exited this investment at an IRR of 30%.
“Bangalore has been the best performing market in India over last couple of years. Mahaveer is an established developer in Bangalore and its projects have performed really well, which has resulted in garnering healthy IRRs for the Fund” said Sharad Mittal, Director and Head, Real Estate Fund, Motilal Oswal Real Estate (MORE).
MORE has also recently invested Rs. 58 Crs with Kolte Patil Developers in Pune and Rs. 56 Crs with Skylark Mansions in Bangalore.
Kolte-Patil Developers is one of the leading developers in Pune. This investment has been in a mixed use development project located in a prime location in Wakad with frontage on the Mumbai-Pune highway.
Skylark is an established brand in Bangalore and the Fund has partnered with the developer for their upcoming residential project located in Hennur Road, Banaglore.
“Both these investments have been in line with our strategy to invest with established developers for their mid-income housing projects at city centric locations. Within a year of closing, we have committed the entire capital of IREF II with well-known brands across India.” said Sharad Mittal.
IREF II is a Rs. 500 Crs fund which was closed in March 2015. Entire capital raised has been committed from this Fund and have invested with ATS Infrastructure, Shriram Properties, Rajesh Lifespaces, Ahuja Constructions, Casa Grande, Kolte-Patil Developers, Mahaveer and Skylark.
The first fund, India Realty Excellence Fund (IREF), is currently under exit mode and has already returned 85% capital back to its investors.