Red Fort completes first equity haul for $500m fund

The New Delhi-based private equity real estate firm has raised $79m in a first closing for its Red Fort India Real Estate Fund II, according to filings with the SEC. The firm’s ultimate capital raising target for the vehicle is $500m

Red Fort Capital, the New Delhi-based private equity real estate firm, has made inroads into the capital raising for its second India-focused opportunity fund.

According to SEC filings, the firm has raised $79 million for its Red Fort India Real Estate Fund II, a vehicle through which the firm plans to invest in India’s residential and office sectors. Red Fort’s total capital raising target for the vehicle is $500 million and it is thought the firm is to make further closings shortly, according to those familiar with the matter.

Investors’ minimum commitment to the fund is $10 million, according to the filing. Investors in Red Fort’s first fund, which closed on $400 million prior to the advent of the credit crunch, included a mix of US institutions, insurance companies and sovereign wealth funds, some of which are understood to have made repeat investments. Red Fort would not comment on its capital raising efforts.

The firm has been one of few India-focused private equity real estate firms to have made full-circle investments from private real estate funds. It announced at the turn of the year it had already returned more than $100 million to investors having ‘harvested’ four of its investments in India’s residential and office sectors. The exits were in New Delhi and Chennai.

Parry Singh, managing director of Red Fort Capital, said in the announcement: “Red Fort's Fund I portfolio has transitioned to the harvesting phase, and we are pleased to have returned over $100 million to our investors. Our investment strategy has generated tangible returns through the global economic crisis of 2008-2009, which had minimal impact on India's solid long-term growth fundamentals.”

Earlier this month, Red Fort announced it had already made its first two investments from the capital raised for the second fund. The firm said it had invested in Esencia Phase II, a 108-acre affordable housing development in the Gurgaon area of New Delhi, and Delhi Heights, a 38-acre residential and mixed-use project in the city centre.

In an announcement on these deals, Subhash Bedi, managing director at Red Fort Capital, said: “Our investment strategy for Fund II is a continuation of the successful approach utilised for Fund I, where we emphasized residential development – over 70 percent of the portfolio – as well as strategically located office and mixed-use projects.”