Indiareit to launch $750m offshore fund

The Indian private equity real estate fund will unveil its second offshore fund by the end of the year.

Mumbai-based real estate fund Indiareit is planning to unveil a $500 million (€362 million) overseas fund, its management says. The fund will also have a green-shoe option of $200-$250 million.

Indiareit managing director Ramesh Jogani said the fund, which will come out by the end of the year, will invest in properties in Mumbai, Bangalore, Pune and Hyderabad. The fund will have a lifespan of four years.

Jogani said the fund is looking for investments from private equity players in the US, Europe, the Middle East, Japan and South-East Asia. The fund is also taking on individual investors.

Indiareit launched its first overseas fund, a $200 million vehicle which attracted a $40 million investment from 3i, in August 2006. Much of the investment in that fund came from Middle East investors, with a large amount coming also from private equity firms in Singapore and the UK.

Indiareit was set up in March 2006 by Piramal Enterprises, a Rs 30 billion ($739 million) company headed by Indian businessman Ajay Piramal. The firm also has a domestic fund of Rs 350 crore with a greenshoe option of another Rs 350 crore.  The firm recently raised Rs 400 crore through its first retail-focused fund, Indiareit Fund Scheme III. Piramal’s core businesses are in the pharmaceutical healthcare, textiles, glass packaging and engineering sectors.

This is only the latest in a string of fund launches this year targeting India. In August he Mumbai-based Housing Development Finance Corporation (HDFC) closed on a new $800 million (€587 million) fund that will invest in Indian real estate on behalf of 28 foreign investors. Also in August, 3i Group launched a $1 billion (€740 million) fund to invest in the rapidly growing Indian infrastructure market. And in June, Bahrain-based Khaleej Finance and Investment (KFI) partnered with two Kuwait-based investors to manage and promote a $200 million (€149 million) fund that will target real estate and industry in India.