Companies

Motilal Oswal real estate PE arm achieves first close of fifth fund

Our Bureau | | Updated on: May 20, 2021
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The fund, launched with a target corpus of ₹800 crore, has received commitments totalling ₹650 crore

Motilal Oswal Real Estate (MORE), the real estate private equity arm of Motilal Oswal Financial Services Ltd, has achieved the first close of its fifth real estate fund, India Realty Excellence Fund V (IREF V).

The fund, launched with a target corpus of ₹800 crore, has received commitments totalling ₹650 crore, it said in a statement.

Earlier in January, MORE said it was looking to raise up to ₹800 crore through its fifth real estate fund.

ALSO READ: Motilal Oswal aims to raise ₹800 cr through its fifth real estate fund

This proceeds were raised from high net worth individuals and family offices. The fund has been set up as an alternative investment fund (AIF Category II), the company said in a statement.

The fund will focus on providing senior secured debt in post-approval projects. It plans to deploy the capital in mid-income and affordable residential projects across the top seven cities in the country, while selectively investing in commercial projects.

IREF V would undertake 12-15 transactions over its entire fund life.

Vishal Tulsyan, Managing Director and Chief Executive Officer at MOPE said, “We believe that the realty sector is currently at an inflection point. With this fund, our cumulative private equity assets under management (AUM) have crossed $1 billion and real estate forms a key part of that AUM. We will continue to strengthen our position as a real estate investor by capitalising on such diverse opportunities over years to come”.

MORE is a part of Motilal Oswal Private Equity (MOPE), the alternative investments platform of Motilal Oswal Financial Services Ltd. The cumulative AUM under MOPE is more than ₹7,500 crore.

Sharad Mittal, Director and Chief Executive Officer of MORE said, “There has been a huge gap in construction finance available in the sector over the last two years pursuant to the NBFC crisis and now the Covid-19 pandemic. The real estate sector has gathered a lot of momentum during the last 6-7 months on the back of bottomed-out prices, peak affordability, historically low mortgage rates, Govt. incentives and increasing emotional value of home-ownership during the pandemic. Several developers have clocked record sales in the last two quarters of FY 2021. However, liquidity is still a concern which is where this fund will help our developer partners”.

“We have already concluded our first investment in IREF V with Shriram Properties in Bangalore and have a strong pipeline of deals that we are currently evaluating,” he added.

Published on May 20, 2021

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