INSUBCONTINENT EXCLUSIVE:
MUMBAI: Motilal Oswal Real Estate (MORE), the real estate arm of Motilal Oswal Private Equity, has raised over Rs 575 crore through the
first close of its fourth real estate fund India Realty Excellence Fund IV (IREF IV).
The fund plans to deploy the capital in mid-income and
affordable residential projects across six top cities in India while selectively investing in commercial projects
The new fund’s investment strategy will be an extension of the strategy of MORE’s two earlier funds, IREF II and IREF III.
IREF IV would
focus on early stage structured equity and debt investments with established developers and undertake 12-15 transactions with average size
of Rs 80 crore to Rs 150 crore each.
“We have achieved the first close worth Rs 575 crore for the fund within three months of launch
In this fund, we have also witnessed repeat commitments from many existing investors from our previous funds,” Sharad Mittal, director
CEO, MORE, told ET.
The money has been raised from high net worth individuals (HNIs) and family offices
The fund was set up as an alternative investment fund (AIF Category II).
Till date MORE has invested capital in the real estate sector
through three real estate funds and portfolio management services (PMS) and proprietary (Prop) investments
Currently, MORE has assets under managment (AUM) exceeding Rs
Of this, IREF has AUM of Rs 200 crore, IREF II has Rs 500 crores, IREF III Rs 1,030 crores and balance under PMS / Prop Investments.
MORE is
part of Motilal Oswal Private Equity (MOPE), which is the alternative investments platform of Motilal Oswal Group
The total AUM under MOPE is now over Rs 5,000 crore.
MORE’s third fund, IREF III, which achieved its final close last year, has till date
made 15 investments and secured 2 complete exits at an investment level internal rate of return (IRR) of 22.3%
The fund has returned money equalling 25% of the investible funds back to its investors.
MORE’s second fund, IREF II achieved its final
close in 2015 and has till date made 14 investments and secured 7 complete exits at an investment level IRR of 22.1%
The fund has returned nearly 82% of the fund corpus back to its investors.
Through three of its earlier funds, MORE established its
partnership with various developers over the last four years
It has made six investments in Chennai’s Casagrand Group, five in Delhi-National Capital Region’s ATS Infrastructure, three in
Mumbai’s Rajesh Lifespaces and two in Bangalore’s Shriram Properties.
“We have scaled up the real estate private equity business by
more than 10 times in the past five years
We are very positive on this sector and investing in this segment shall continue to be our focus in the coming years,” said Vishal
Tulsyan, CEO of MOPE.
The fund, according to Mittal, has a strong pipeline of deals for its fourth fund and plans to make its first
investment over the next few weeks.
The impact of government policies like Prime Minister Awas Yojna and introduction of a regulator (RERA)
is gradually playing out across all major cities of India indicating early signs of a recovery in residential real estate
Nearly 75% of the new units launched are priced below Rs 75 lakh while apartment sizes over the years have fallen by over 12% showing the
developer’s affinity towards affordable housing.
Experts believe that while sales are showing modest improvement, prices in all major
cities are still stagnant or trending downwards as developers endeavour to address the inventory overhang
All these factors indicate early signs of a volume-based recovery in residential real estate and offer a good investment opportunity for
