Indiareit Fund Advisors has merged with its parent conglomerate’s non-banking financial company (NBFC) arm to form a management business offering both debt and equity to India’s real estate sector.
The new entity, Piramal Fund Management, now manages a total of $1.8 billion across its equity and debt platforms, making it one of the larger real estate funding platforms in India. The manager is expecting to offer developers all financing options, from private equity to mezzanine and senior secured debt, according to a statement.
The new team will total approximately 60 professionals. It currently manages five domestic funds, one offshore fund, three third-party mandates and a separate account with the Canada Pension Plan Investment Board. The firm is expected to continue offering strategy-focused funds and will continue to manage both third-party and its own capital.
Indeed, former Indiareit managing director and current managing director of Piramal Fund Management Khushru Jijina insisted that this merger implies no change for the firm’s current limited partners. It will only represent a change for the developers that the firm works with, offering them a “one-stop solution” for their financing needs.
“A few months ago, we starting dialoguing with the NBFC arm more, and we discovered some strong synergies,” Jijina told PERE. “For one, we were operating in the same five cities, and the investment model was the same: it was relationship-driven. And on several occasions, we’ve even approached the same developers.”
With the new integrated platform, Jijina is hoping to offer Indian developers an “end-to-end financing solution,” and the form of the financing can depend on the stage of each project without Piramal competing with itself. He also said both sides will be able to draw from the experience and relationships of the other to find deals.
“This reorganization [makes us] uniquely capable of catering to the entire capital stack – right from early stage equity to late stage debt and are therefore able to act as perpetual providers of capital within this space,” he said.
So far this year, business for both the funds management and NBFC for Piramal has improved dramatically. In the last three months, the firms have committed approximately INR24 billion across debt and equity businesses, as compared to INR19 billion of loans for all of 2013. And Jijina predicted that with an end-to-end financing platform, Piramal’s dealflow should continue to increase.