By Accommodation Times News Services
IDFC Alternatives, a wholly owned subsidiary of IDFC Limited has raised its first Rs 750 crore through its first fund focused on real estate market f India, this brings some new investment in the Indian realty market, which is in deem. The maiden real estate fund called the IDFC Real Estate Yield Fund will invest Rs 60 to 80 crore and gross target of 22 per cent returns. The four year (extendable by one year) close ended private equity fund will invest in projects in prominent locations across six cities in India including Delhi, Mumbai, Chennai, Bangalore, Hyderabad and Pune.
“This is our first real estate fund and we feel confident about its performance. The real estate sector is going through a tough phase in the backdrop of a market slowdown and most developers are stretched with reduced cash flows. We will not invest in speculative markets,” says M.K. Sinha, Managing Partner & CEO, IDFC Alternatives.
The company has raised the money from domestic investors within short span of 10 weeks. The new fund from the IDFC Group with a medium term horizon and will focus on debt deals that generate high yields, while ensuring downside protection and adequate security cover. IDFC Real Estate Yield Fund, which has already committed Rs 123 crores across two residential projects in Pune and Bangalore, aims to build a high-quality portfolio by focusing on established developers and brown field residential projects.
“It is a focused debt fund that targets a regular distribution of income to investors. The fund would be invested in ‘on-going’ residential projects to mitigate execution related risks. It has a lower risk profile given the secured nature of underlying investments and has been designed to be an investor-friendly product,” says Ritesh Vohra, Partner Real Estate Investments, IDFC Alternatives said.