Indiabulls Asset Management Company has launched its real estate fund, an alternative investment fund (AIF) that will target residential projects in Mumbai, Delhi, Chennai, Bengaluru and Pune.

The fund, rated ‘AAA (AIF)’ by CARE Ratings, has a target fund size of ₹500 crore with an option of raising another ₹500 crore and an average deal tenure of three years.

The investments shall be through fully-secured non-convertible debentures with quarterly returns. The fund is sponsored by Indiabulls Housing Finance.

In a press release, Akshay Gupta, Group Executive Head and CEO, Indiabulls AMC, said the company plans “to scale up its alternative investment fund/ co-investment presence and raise over ₹10,000 crore in the real estate fund category in the next five years from offshore and onshore markets.”

Rate cut to boost demand

The AMC said the recent announcement of the interest rate cut is expected to boost housing demand and revive the real estate market. Additionally, the relaxation of foreign direct investment norms in the construction sector, the ordinance on land acquisition and the Real Estate (Development and Regulation) Bill (pending Parliamentary approval) can spur new project developments.

Ambar Maheshwari, formerly with realty consultant Jones Lang LaSalle, has been appointed CEO of the AIF business.

Speaking to BusinessLine , Maheshwari said, “We will look at well-located residential projects with high sales velocity and developers with well-established track records.

“Also, a percentage of the project must have been sold. Our focus will be on projects which can absorb debt of ₹80 crore.”

AIFs are funds based in India which pool capital from Indian and foreign investors to invest in accordance with a well-defined policy. This includes venture funds, private equity and hedge funds.

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