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Motilal Oswal launches its third real estate fund; Targets to raise Rs. 1,000 Crs

Mumbai 21-Oct-2015


Motilal Oswal launches its third real estate fund; Targets to raise Rs. 1,000 Crs

Motilal Oswal Real Estate (MORE), the real estate private equity arm of Motilal Oswal Group, is set to launch its third real estate fund and targets to raise up to Rs. 1,000 Crs. The fund has been set up as SEBI registered AIF Category II Fund and has already received the requisite approval from the authorities. Majority of this fund shall be raised from HNIs and family offices. 
The Fund shall primarily deploy capital in residential projects by established developers in MMR, NCR, Bangalore, Pune, Chennai and Hyderabad. Fund will target to undertake ten to twelve transactions with deal sizes ranging from Rs.80 crore to Rs.120 crore.
“Real estate sector is going through consolidation phase and prices are expected to remain stagnant for some time. This is the correct time for investors to invest through indirect investing as we participate in the project profits rather than banking completely on the future price rise” said Sharad Mittal, Director and Head, Real Estate Fund.
Motilal Oswal’s strategy is an extension of its experience with its two earlier funds wherein it has invested capital, typically under mezzanine structure, with renowned developers such as ATS, Shriram Properties, Godrej Properties, Rajesh Lifespaces, Ahuja, Casa Grande etc across top Indian cities. The second fund was closed in March 2015 and had raised Rs. 500 Crs. This fund is currently in investment mode and has deployed ~ 80% of the capital. The balance capital shall be deployed in next 2 – 3 months. Its 1st Fund was a Rs. 200 Crs fund raised in 2009. This fund has been fully deployed and is currently in an exit mode. The fund has exited its 4 out of 7 investments and has returned ~ 82% of the capital. MORE current AUM is of ~ Rs. 1,000 Crs, They are looking to double its AUM with their third fund.
“We shall continue to undertake mezzanine investments with established developers for their mid income housing projects across top cities. Opportunistically, we shall also undertake structured equity investments depending on the market scenario” said Sharad Mittal.
The fund, with a tenor of 5 years from final close, shall target a gross internal rate of return of ~ 23 - 25% from its investments.
Vishal Tulsyan, MD & CEO, Motilal Oswal Private Equity Investment Advisors said, “Over the past few years, real estate investing has become one of our key business under the private equity business. We are committed to grow this business further and are targeting to become the preferred investment house for our investors”   
About Motilal Oswal Private Equity Business 
MOPE Investment Advisors Pvt. Ltd. (MOPE) is a subsidiary of Motilal Oswal Financial Services Ltd. (MOFSL), a diversified financial services group with businesses in Securities, Asset Management, Private Equity and Investment Banking. MOPE is currently managing two growth capital funds i.e. India Business Excellence Fund (IBEF) and India Business Excellence Fund II (IBEF II) focused on providing growth capital to mid-market companies, typically in the range of US$ 10-20 million, across sectors. IBEF, launched in 2007 is a INR 550 Crore ($ 125 million) is fully invested and has thirteen portfolio companies across sectors such as food processing, bulk packaging, power transformers and power infra enablers, ITES, financial services, EMS, FMCG, auto components, etc. It has already made five partial exits. On the back of its success of IBEF, MOPE has raised IBEF II, an Rs.950 Crore (~USD 160 million) growth capital fund. Currently, investments are being made through IBEF II.  

In addition, MOPE is also managing two real estate funds – India Realty Excellence Fund (IREF) and IREF II. IREF is a Rs. 200 Crs fund closed in December 2009. This fund is currently in its exit mode and has exited 4 out of 7 investments. IREF II is a Rs. 500 Cr fund which was closed in March 2015. IREF II is currently in investment mode and has invested across projects in MMR, Bangalore and NCR.

About Motilal Oswal Financial Services Limited
Motilal Oswal Financial Services Ltd. (NSE: MOTILALOFS, BSE: 532892, BLOOMBERG: MOFS IN) is a well-diversified, financial services company focused on wealth creation for all its customers, such as institutional, corporate, HNI and retail. Its services and product offerings include wealth management, retail broking and distribution, institutional broking, asset management, investment banking, private equity, commodity broking and Home Finance. MOSL won the “Best Equity Broking House – Institutional Clients” & Best Equity Broking House – Cash Segment” at the D& B Equity broking Awards 2015. Motilal Oswal Securities (MOSL) won the Best Performing National Financial Advisor Equity Broker' award at the CNBC TV18 Financial Advisor Awards 2014 for the 4 th year in a row. MOSL won ‘Best Equity Broker’ award at Bloomberg UTV Financial Leadership Awards 2012, ‘Retailer of the Year (Banking & Financial Services) award at Retail Excellence Awards 2012, and was ranked 2nd in the “Best Overall Brokerage” category by Asia Money in 2011. MOFSL won the ‘Best Employer Brand’ Award at the IPE Banking, Financial Services & Insurance Awards 2012. MOSL received the ‘Depository Participant of the Year’ award at the Money Today FPCIL Awards 2012 and was ranked among Top 3 in 4 categories in the Asia Money Brokers Poll 2012 

For further details contact:
Hari Krishnan
Motilal Oswal Financial Services 
Ph - +91-22-39825500
Mob- +91-9820520392

Anirudh Rajan / Alpesh Nakrani
Paradigm Shift Public Relations
Ph-   +91-22 22813797 / 98
Mob- +91-9892343828/ +91-9869121167

Vishal Tulsyan / Vijay Dhanuka
Motilal Oswal Private Equity 
Ph-   022-39825500