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Ahmedabad-based Lalbhai Group-led Amplus Capital on Tuesday announced first closure of its second real estate fund Amplus Realty Fund - II, with a total commitment of Rs 200 crore of the total targeted corpus of Rs 300 crore.
The entire fund-raising is expected to be wrapped up in a short period, the company said. The fund, which was launched recently, will invest for majority stake within a ticket size of Rs 20-40 crore per transaction in major metros. It is focused on early-stage equity investments in mid-sized residential real estate projects with execution period of 36-42 months.
Anuranjan Mohnot, Managing Director, Amplus Capital Advisors Pvt Ltd said, "Many established developers are traditionally averse to high-cost debt. Further, they are looking for patient equity funding for their new projects. However, they are finding it difficult because there are just a few funds in this space and since most of the funds are focused on debt/ mezzanine funds."
Raised in 2013, the first fund has returned an amount equivalent to 50 per cent of the capital commitment within three years of the fund’s life and is expected to return the entire capital by the end of this calendar year, with returns in the next 18-24 months. The fund is expected to deliver 25 per cent IRR at the fund level, he said.
Commenting on the fund raising, Jayesh Shah, co-Founder of Amplus said, "More than 65 per cent of investors in Amplus Realty Fund – I are participating in the new fund with increased commitments. We expect the participation level to increase by the final closing of Fund II. We look forward to scaling up this platform gradually."
Amplus Realty Fund – I, a Rs 135-crore fund, was raised in 2013 having investments across eight projects in Bengaluru, Chennai, Pune, and Ahmedabad, with prominent names in the real estate space, including Shriram Properties, XS Real Properties, and Assetz Homes.
Although the overall real estate market continues to be sluggish and cash-starved, Amplus’ investment philosophy of investing in early-stage mid-sized residential projects with quick turnaround period has benefited developers as well as investors, the company said.
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