Kolkata, Sept 9
THE first tranche of the Rs 500-crore Real Estate Opportunities Fund, which has been co-promoted by the Anand Rathi group, has closed with commitments from investors who were required to put in a minimum of Rs 2 crore.
Talks with prospective investors, including a few overseas entities, for the second tranche should soon gather speed, said sources close to the group, adding that the fund is expected to have an investment cycle of five years with a targeted return of 25 per cent.
The fund, a three-way venture between stockbroker Mr Anand Rathi, real estate developer Mr Atul Chordia, and financier Mr Kaushal Kumbhat, has just commenced negotiations with two overseas funds, both of which are planning to take an exposure to the Indian market.
The deal, if it is finally worked out, will be routed through Mauritius, courtesy a feeder fund.
"We have already started evaluating deployment opportunities in the metros," the sources said, adding that the first deal may be identified in a couple of months.
The primary investment portfolio of Real Estate Opportunities Fund will comprise two aspects - lease rental and project development.
As for the former, the fund will buy pre-leased properties with strong tenant profiles.
With the latter, the idea is to partner with developers in new projects.
Incidentally, the investment horizon (from the land acquisition stage to the final liquidity) is expected to be 24-36 months.
HDFC Bank and Bansi S. Mehta & Co have been engaged as the custodian and tax advisors respectively of the fund. Deloitte Haskins & Sells has been mandated as the auditor.
The fund is expected to gain, inter alia, from the demand for mid-range residential units as well as by the IT sector.
The latter, the sources said, will in future create a huge demand for commercial space.
There will be management fees of two per cent of the capital commitment (over 24 months) and two per cent of the outstanding capital afterward.