Sovereign wealth fund, the Qatar Investment Authority (QIA), has committed $250 million to Mumbai-based ArthVeda Fund Management (AVFM) which will invest the capital in affordable housing in India.
Qatar Holdings, a subsidiary of QIA, has become the sole investor in the strategy which is seeking an internal rate of return in excess of 18 to 21 percent.
AVFM is part of Wadhawan Global Capital, a financial services conglomerate, which also owns Dewan Housing Finance, which has lent over $25 billion to the affordable housing sector in India over the last three decades.
“AVFM’s Affordable Housing Fund leverages our entire group’s leadership in the [low and middle income] lending segment and applies that to investments in affordable housing. I am very proud that a prestigious institution from Qatar has invested in this fund through Arthveda,” said Kapil Wadhawan, chairman and managing director of DHFL and ArthVeda.
According to AVFM, the great push by India to make affordable housing a centre piece of the country’s growth agenda will trigger more foreign investments into this sector.
The Government of India has gradually removed minimum project and investment ticket size restrictions in this segment. The positive foreign direct investment policy changes that have taken place will also continue to give a boost to inward investments, said the firm.
The firm currently operates three other real estate funds in the country, AVFM’s domestic $17 million Dream Fund, which exited in 2015 gave a gross IRR of 17 percent and a mid-income $22 million domestic Star Fund I, which is currently in the asset harvesting stage. A domestic low-income housing fund, Asha, is currently in deployment phase.