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Motilal Oswal Real Estate announces 1st Close of third Real Estate Fund at INR 500 crore

Mumbai 18-Feb-2016

Motilal Oswal Real Estate announces 1st Close of third Real Estate Fund at INR 500 crore

Secures an exit from 2nd fund at 30% IRR ; Invests with Kolte-Patil in Pune and Skylark in Bangalore

Motilal Oswal Real Estate (MORE), the real estate arm of Motilal Oswal Private Equity has announced the 1st close of its recently launched Real Estate Fund – India Realty Excellence Fund III at Rs. 500 crore. The Fund, launched in November 2015 with a target of raising Rs. 1,000 crore, has been able to raise Rs. 500 crore in a quick timespan of 3 months. The new fund, with tenure of five years from final close, will target a gross internal rate of return of 23-25% from its investments. MORE has already started committing money from its 3rd fund. The 2nd fund (IREF II), with a corpus of Rs. 500 Crs, was raised in 15 months and was closed in March 2015. Total AUM under MORE now stands at Rs. 1,500 Crs.

Vishal Tulsyan, MD & CEO, Motilal Oswal Private Equity Investment Advisors said 
"Real estate vertical has become one of our key vertical within the overall private equity business. Motilal Oswal Private Equity now manages more than Rs. 3,000 Crs across 5 funds spread across growth capital and real estate”
“Indirect investing should be the preferred investment route given the current market scenario. We plan to undertake mezzanine transactions with established developers across top Indian cities and are focused to generate superior risk adjusted returns for our investors” said Sharad Mittal, Director and Head, Real Estate Fund, Motilal Oswal Real Estate (MORE).

Further, MORE has announced its 1st complete exit from Mahaveer Developers in Bangalore. IREF II had invested Rs. 40 Crs for their two projects in Bangalore in March 2014 and has exited this investment at an IRR of ~ 30%.

“Bangalore has been the best performing market in India over last couple of years. Mahaveer is an established developer in Bangalore and its projects have performed really well, which has resulted in garnering healthy IRRs for the Fund” said Sharad Mittal, Director and Head, Real Estate Fund, Motilal Oswal Real Estate (MORE).

MORE has also recently invested Rs. 58 Crs with Kolte Patil Developers in Pune and Rs. 56 Crs with Skylark Mansions in Bangalore.

Kolte-Patil Developers is one of the leading developers in Pune. This investment has been in a mixed use development project located in a prime location in Wakad with frontage on the Mumbai-Pune highway.

Skylark is an established brand in Bangalore and the Fund has partnered with the developer for their upcoming residential project located in Hennur Road, Banaglore.

“Both these investments have been in line with our strategy to invest with established developers for their mid-income housing projects at city centric locations. Within a year of closing, we have committed the entire capital of IREF II with well-known brands  across India.” said Sharad Mittal.     

IREF II is a Rs. 500 Crs fund which was closed in March 2015. Entire capital raised has been committed from this Fund and have invested with ATS Infrastructure, Shriram Properties, Rajesh Lifespaces, Ahuja Constructions, Casa Grande, Kolte-Patil Developers, Mahaveer and Skylark. 

The first fund, India Realty Excellence Fund (IREF), is currently under exit mode and has already returned ~ 85% capital back to its investors.

About Motilal Oswal Real Estate Business
Motilal Oswal Real Estate Investment Advisors Pvt. Ltd. (MORE) is managing three real estate funds, namely India Realty Excellence Fund (IREF), India Realty Excellence Fund II (IREF II) & India Realty Excellence Fund III (IREF III). IREF, launched in 2008 is a ~Rs 200 cr domestic real estate fund focused on equity investments in real estate projects in top three cities in India viz. Mumbai, Pune and Bangalore. IREF has made seven investments across asset classes and has partnered with mix of marquee and emerging developers like Godrej Properties, Supreme Universal etc. On the back of its success, MORE launched IREF II - a Rs 500 cr domestic real estate fund. The fund has been fully committed and has invested with established developers such that Ahuja Constructions, Shriram Properties, Kolte Patil etc. The investments have been in line with the strategy to ensure regular payouts with downside protection and coupled with upside sharing by investing with reputed developers with an established track record. MORE has recently launched its 3rd real estate fund and is targeting to raise Rs. 1,000 Crs.

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 an 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 three partial exits. On the back of its success of IBEF, MOPE has raised IBEF II, a Rs.950 Crore (~USD 160 million) growth capital fund. Currently, investments are being made through IBEF II.  

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

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