Motilal Oswal Real Estate, the real estate arm of the Mumbai-based financial services firm Motilal Oswal, has raised INR5 billion (€70 million; $78.57 million) in the final close of its second real estate fund.
The firm is also understood to be plotting the launch of another residential-focused real estate fund, which will have an INR 7.5 billion fundraising target.
India Realty Excellence Fund (IREF) II, launched in November 2013, attracted INR2.2 billion in the first close in March last year. The fund was launched with an initial target of INR3 billion, with an option to oversubscribe by INR2 billion, taking the total fundraising target to INR5 billion.
The fund’s capital is being invested in mezzanine debt deals in residential projects targeting middle-income buyers in some of the key cities of India. Close to 80 percent of the capital raised is understood to have been deployed in five cities in India over the last 15 months.
Sharad Mittal, the firm’s director and head of real estate, said that the third real estate fund will be launched once the remaining capital of the existing fund has been deployed.
“The real estate fund platform continues to remain a critical focus area under the Motilal Oswal Private Equity Business,” Vishal Tulsyan, managing director and chief executive officer of Motilal Oswal Private Equity Investment Advisors, said in a statement.
“The fund has closed four new transactions with developers in Bangalore, Mumbai, NCR and Chennai. Together with the earlier investments with Ahuja Developers in Mumbai and the Mahaveer Group in Bangalore, the fund has now deployed more than INR3.85 billion.”
The firm’s first real estate fund called IREF was launched in 2008 with a similar mandate to invest in residential projects. The INR2 billion raised in equity commitments for the fund was invested in a total of seven residential investments. The fund is currently in the process of exiting its investments, with 80 percent of the capital already returned to investors.