With capital raising for India-focused funds currently a challenging proposition for many managers, it was only a matter of time before merger activity in the sector became visible.
The first to be taken over was Saffron Asset Advisors, a real estate fund manager with $400 million in assets under management. The firm was acquired in July by India’s largest private equity real estate business, IL&FS Investment Managers.
Now, the next firm reportedly on the blocks is Mumbai-based Indiareit, the investment management business of entrepreneur Ajay Piramal. Unlike some rivals, however, Indiareit has successfully completed fundraisings of late. Operationally led by managing director Ramesh Jogani, the firm operates two domestic capital real estate funds and one offshore vehicle. It manages close to $1 billion in assets, including those of Trikona Trinity, the embattled India investor listed on London’s AIM junior stock exchange.
While no official sales process has been announced, market sources say potential suitors already have been approached, including IL&FS and The Blackstone Group.
According to one source, Piramal is keen to form a banking business and, owing to India regulations, must consequently divest from his real estate holdings. The source added: “Whoever does go for it, they need to be a big buyer.”