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IDFC closes RE debt fund on $114m

Mumbai-based asset manager IDFC Alternatives has reportedly raised its third real estate debt fund which will provide financing to residential developers.

The firm, which was targeting INR 7.5 billion, raised the capital for IDFC SCORE from domestic investors, with a large proportion of investors having committed to prior vehicles.

IDFC SCORE Fund is a structured credit fund focused on the residential sector that aims to provide debt to real estate developers. The firm will invest the capital predominantly in residential projects in the top seven cities across India: Mumbai, Bangalore, Chennai, Delhi, Hyderabad, Pune and Kolkata.

“Real estate markets continue to be slow and the need for capital remains high. We remain risk-averse and will invest in projects that have approvals and have been launched. As long as the developer is good, we are willing to be flexible and be little patient on repayment,” Ritesh Vohra, partner in the real estate team at IDFC Alternatives, told LiveMint.

The fund is IDFC’s third real estate debt fund. The firm’s first fund, the IDFC Proprietary Office Fund, was INR 7 billion in size and has been fully exited generating a 22 percent IRR. The second fund in the series, IDFC Real Estate Yield Fund, has committed its entire corpus of INR 7.5 billion and has returned over INR 3.5 billion to its investors within two years.

With more than INR 17 billion assets under management, IDFC Alternatives is a wholly-owned subsidiary of Indian infrastructure finance corporation IDFC, and is best known for its infrastructure investments. However, in the past few years the Alternatives arm has also branched into private equity and real estate.