Gurgaon-based Jones Lang LaSalle Segregated Funds Group, the Indian investment arm of the property consultancy JLL, is plotting the launch of its second residential real estate fund in the country.
The firm is targeting INR3 billion (€43 million; $48 million) in equity for the fund, slated to be officially launched in the second quarter of this year. Capital raised for the fund will be deployed in residential projects through equity and high yield mezzanine structures across major cities.
The firm is targeting a 20 percent IRR from the fund, which will have a term cycle of five years.
Mridul Upreti, chief executive of JLL Segregated Funds Group, India, told PERE that the capital raised would be invested in small-sized projects with a short tenure. The typical size of a deal would range between INR30 to INR50 crores, and JLL plans to do seven to nine transactions in total. “Our investment strategy has been to invest in projects that get completed in two to three years after the investment has been made,” he said.
High-net-worth investors, family offices and domestic institutions are being approached for commitments. As per the regulations in India, the minimum capital commitment of an investor in an Alternate Investment Fund (AIF) is INR10 million. AIF is the term given to all privately pooled investment funds in the country, including real estate funds.
The firm also plans to raise foreign capital through managed separate accounts in the later part of the year.
JLL Segregated Funds Group is currently deploying capital raised via its first real estate fund in the country. That residential-focused vehicle was launched in 2013 and attracted INR1.61 billion in equity. Over 60 percent of the fund has so far been invested in residential projects in Bangalore and Chennai.
The Segregated Funds Group was set up by the consultancy firm JLL in 2012 as an investment management arm to specifically raise real estate funds in India. The global fund management firm LaSalle Investment Management, an independent subsidiary of JLL, is not present in India.