Walton planning $1bn India fund

The US private equity firm is raising its first India-dedicated real estate fund, following a significant allocation in India from its previous $2.5 billion global fund.

Walton Street Capital is planning a $1 billion (€670 million) real estate fund for India, the Business Standard reported Friday. The firm’s Indian arm, Walton Street Capital India, has already started raising the fund and is expecting the first closure in the next few months, with a final closing in march of next year.

The fund will be the first India-dedicated fund for the firm. Previously, Walton Street’s $2.5 billion global fund had invested a significant amount in the country, where Walton Street has been operating for the past year and a half. Last year the firm invested about 8 billion rupees ($200 million) in special purpose vehicles in the country, investing in retail malls, office buildings, housing and hospitality. In November of  Walton Street made a $100 million (€69 million) investment in Bangalore-based property developer Shriram Properties, picking up an undisclosed stake in the company. Shriram Properties, the real estate division of the Shriram Group, plans to use the funds for developments in north and west India within the next year. Shriram currently has operations across India in cities such as Chennai, Kolkata, Mysore, Coimbatore and Bangalore. Its developments range from apartments to IT parks to townships and luxury homes.

In September of 2007 the company picked up a stake in a project to develop Hindustan Motors’ excess land in Uttarpara. In that project, 20 million square feet is set to be developed. Starwood Capital Group and Shiram Properties are also partners in that project.

Amber Malhotra, executive director of Walton Street Capital India, told the paper that the firm will actively target the affordable housing sector. Malhotra added that the firm believes that the recent slowdown in the Indian housing market that has been seen has been happening only on the micro level, and that there is still a great deal of opportunity in the sector for private equity firms.

Walton Street Capital India has a nine person team which architects & civil engineers. Founded in 1994, the global firm has received $3.5 billion in equity commitments over the years.