Everstone holds $200m closing for second JV logistics fund

The India-focused private equity manager has returned to the real estate space with a second industrial property fund, attracting global institutional investors such as North American pension funds and endowments.

Everstone Capital, the Indian private equity firm, has held its first capital closing for a real estate fund in almost four years.

The firm’s IndoSpace Logistics Parks II fund, the second fund from its joint venture with US-based industrial real estate investment management company Realterm Global, has garnered between $200 million and $250 million from around half a dozen US LPs.

According to PERE Research and Analytics, the Overseas Private Investment Corporation (OPIC) also has made a $100 million financing commitment to the fund, which could be used to leverage its capital outlays.

Everstone has a set a $350 million hard-cap for the fund. It is understood to be in talks with several other LPs and hopes to hold a final close on the fund in either Q3 or Q4 of this year.

Everstone officially launched its fundraising process in the fourth quarter of last year, after the firm had fully committed approximately $600 million of capital raised from its past two funds, Horizon Realty Fund and ILP I, its previous JV logistics fund which attracted $240 million and closed in April 2009.

Now that it has held a first close, ILP II is expected to start making investments imminently. PERE understands the firm is targeting a gross IRR of between 25 percent and 30 percent from the fund’s investments.

Like Everstone’s other real estate funds, ILP II is predominantly backed by foreign investors as it is domiciled offshore and the Indian rupee is not freely convertible. According to industry sources in India, Everstone has not raised a Rupee-denominated real estate fund since it closed an $80 million fund in 2005.

Indospace Logistics Parks’ first fund is currently developing 10 parks in India totaling 15 million square feet. Occupiers at the parks include retailers like L'Oreal, Volkswagen, Nissan and Levi's. 

Over the past year, India’s private equity real estate deals halved by volume and value. That was partly because many firms have scheduled fund closings for this year, according to Hari Krishna, director of Everstone rival Kotak Investment Advisors’ Realty Fund. He expected real estate deal activity to pick up in 2014, once funds like Everstone’s have closed.

Neither Everstone or Realterm Global would comment on the fundraising.